Weekly COT report: Managed funds most bullish on gold in 3-months
- Traders trimmed net-long exposure to the US dollar for a fifth consecutive week. According to data from IMM, traders are now net-long the dollar by $6.2 billion (down -$1.4 billion on the week).
- Large speculators pushed net-long exposure to euro futures to their most bullish level since in 6-months
- Traders flipped to net-log exposure on GBP futures
- Excluding GBP, all weekly changes among FX majors were below 10k contracts
US dollar:
Bullish exposure to the US dollar continues to dwindle, which is at odds with the fact that the Fed are about to embark on multiple hikes. Yet it’s also possible that, with so many hikes now expected, investors are concerned that the Fed may tip the US into recession. According to data from IMM, net-long exposure to the dollar has fallen to its lowest level since April and has fallen for five consecutive weeks. Meanwhile, traders are their most bullish on emerging markets against the dollar in around 2 years.
GBP futures:
Traders flipped to net-long exposure on the British pound for the first time since November. Bears trimmed -5.3k contract yet added 5.4k long contracts which tipped traders to net-long exposure of 2.2k contracts. So traders have now placed their bets but we now need prices to back up this bias and break higher.
AUD futures:
Traders remain overwhelmingly net-short the Australian dollar. In fact net-short exposure is close to a record level of bearishness whilst bulls are side lined. But a problem many bears are facing is that AUD prices remain well supported above 70c. This means that if prices do not move lower as anticipated, bears may be forced to close out and inadvertently end up supporting a short-covering rally they didn’t see coming.
As of Tuesday 15th February 2022
- Managed funds on gold futures rose to a 3-month high
- Net-long exposure to copper rose to a 16-week high
Gold futures:
Gold grabbed plenty of headlines last week amidst the tensions between Russia and Ukraine, helping it rally for a third consecutive week and challenge $1900. Managed funds piled into the yellow metal and were their most bullish on it in three-months but, looking at how prices rallied into the weekend, we strongly suspect net-long exposure if actually much higher than the delayed COT data suggests. The biggest threat to gold prices right now is a Russian retreat. And as that doesn’t look very likely then we expect dips to be bought and for an eventual break above 1900.
Copper futures:
Positioning on copper futures has piqued our interest as net-long exposure has risen to its highest level in 16-weels, and at its fastest over the same period. Furthermore, it was seen with rising gross longs and reduction of shorts so we might just have the early indications of a bullish rally developing. But what we now need to see is prices rising sustainably above $4.50 and for them to challenge the $4.70 highs, or we may be at risk of another leg lower as these pre-emptive bulls are forced to liquidate.
How to trade with City Index
You can easily trade with City Index by using these four easy steps:
-
Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024