Gold is trading near all-time highs, awaiting the NFP release just weeks ahead of the highly-anticipated start of a rate cutting cycle, TDS Senior Commodity Strategist Daniel Ghali notes.

Gold is trading near all-time highs

“Today's miss on ADP doesn't bode well for a directional beat in NFP, but that is not a necessary condition for Gold prices to fizzle out. Certainly, the beat TD Securities expects on NFP could help catalyze a shift in positions, but our read on positioning dynamics is now already at extreme levels that have historically marked significant turning points in Gold markets.”

“Macro fund positioning is now at levels only seen during the Brexit referendum in 2016, the "stealth QE" narrative in 2019, or in the peak panic of the Covid-19 crisis in March 2020. This time around, physical markets have already fizzled out, whereas we also see extremes in Shanghai trader positions alongside CTA trend followers. Downside risks are more potent.”