Gold prices continue to melt into new all-time highs in the overnight, TDS Senior Commodity Strategist Daniel Ghali notes.

Shanghai trader positioning has edged off its record highs

“Clearly, some buying activity is hitting the tapes, but the source remains off of our radar for now. In fact, visible flows point to modest outflows from broad commodity funds and a continued trend of outflows Chinese Gold ETFs. Shanghai trader positioning has edged off its record highs, with aggregate net positioning for the top traders remaining fairly stable.”

“Certainly, participants feel comfortable knowing that central banks are on the bid, but on a six-month moving average basis, official global central bank flows are now trending towards their lowest levels in five years. In Comex Gold, non-commercial 'directional short' positioning, which accounts for EFP positioning, points to nearly no shorts remaining following recent short covering.”

“Our latest gauge of macro fund positioning remained just a nudge below its maximum historical levels, and CTAs are effectively max long. We only note marginal inflows into popular Western Gold ETFs, and perhaps most notable, signs of risk parity and vol-targeting funds' releveraging.”