Macro funds skillfully managed to liquidate nearly 60% of their extreme position size in the weeks that followed the US elections, mitigating subsequent downside risks, barring a change in the prevailing macro narrative, TDS’ Senior Commodity Strategist Daniel Ghali notes.

Gold prices need another catalyst for the next round of liquidations

“CTA positioning has contributed to some whipsaws, but is now unlikely to add to downside flows until prices break south of $2550/oz. Shanghai traders' positions have been on a significant downtrend, but have stabilized over the last sessions.”

“In turn, while buying exhaustion appears apparent, Gold prices will require another catalyst for the next round of liquidations to hit the tapes, which point to a range-bound outlook for the near-term.”

“Positioning in silver markets has remained cleaner, and the current set-up for CTA flows rather points to notable upside asymmetry such that algos will buy in an uptape, but will no longer sell in a downtape over the coming week. This points to favorable tailwinds in silver on an XAUXAG basis.”