Precious metals have remained locked in a tight range, but recent flows have been interesting, TDS’ Senior Commodity Strategist Daniel Ghali notes.

Precious metals  remain locked in a tight range

“Firstly, our advanced positioning analytics suggest macro funds have re-accumulated a substantial portion of their extreme positions held in Gold prior to US election night. This is surprising given the notably different outlook for Fed policy, which no longer bears the same risk of an 'overly easy' policy on the horizon, which points to additional vulnerabilities.”

“CTAs have been whipsawed both ways, but price action has now unlocked scenarios that could see sizable liquidations over the coming week, which will feature Chair Powell's moderated discussion, the NFP report and will soon be followed by the Dec FOMC meeting.”

“There may well be another shoe to drop after all before the balance of risks shifts back towards the upside in Gold.”