The estimated value of open interest across metals markets increased to ~$314 billion with precious metals up ~$7.4 billion WOW to a six-week high (Jan 6, Figure 6Price and contract losses in gold drove a consecutive week of decline in the estimated value of precious metals open interest to a seven-week low), flowing from contract gains in gold led by CTA buying. The rally in gold above $1,860/oz follows slowing growth in non-farm payrolls to 223,000 in December and cooling wage inflation. US 10-year treasury yields fell below 3.6% by week-end, contributing to the price appreciation in gold as well.
HOW TO READ THIS: SMALL GREEN BUBBLES AFTER BIG GREEN BUBBLES MEANS BUYING MOMENTUM IS SLOWING IN THAT DIRECTION SHORT TERM. THINK OF IT LIKE CAPITULATION IN PRICE IS ACCOMPANIED BY A SMALL BUBBLE USUALLY UNLESS THERE IS AN EVENT LIKE A WAR. THESMALLER THE BUBBLE, THE LESS AND LESS MONEY CTAS HAVE TO SPEND
The long-term trading signal on COMEX Gold switched to ‘buy’, aligning with the short term signal. Momentum across base metals and agricultural markets declined slightly
What does it mean?
It means that according to them, the longer term fund flows are turning positive. But the shorter term CTA flows are markedly overbought.
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