TD Securities’ Ryan McKay and Bart Melek note that CTA (Commodity Trading Advisors) net long positioning in Gold is becoming more entrenched as discretionary demand improves. A Fed likely to remain on hold should help keep the precious metal supported at the upper end of its range, while nearby CTA triggers are expected to drive only limited position changes. Silver also stands out for near-term systematic flows, with a break above $66.80/oz likely to attract further buying.

CTA long positioning gains firmer support

“CTA net long positioning in gold is becoming more entrenched alongside renewed discretionary appetite.”

“A Fed likely to remain on hold amid weaker economic data, and despite upside in energy prices, is likely to see the yellow metal well-supported in the higher range.”

“Nearest CTA triggers on both sides are only likely to catalyze minimal shifts in positioning, highlighting a growing support for systematic positions.”

“Silver continues to stand out for near-term CTA flows in the precious complex, with prices above $66.80/oz likely to see further buying.”

“Furthermore, when looking at pricing simulations, CTAs are likely to add another 2-5% of historic max length under all pricing scenarios into next week.”