20240521 Thoughts 29 – The futures-market tells us a long story

Let us once again analyze the futures markets, which are currently providing interesting inputs.

With the Commitment of Traders (COT), the Commodity Futures Trading Commission (CFTC) publishes weekly statistics on what type of investors (commercials, non-commercials) are invested in individual futures and to what extent.

Although the gold price climbs to new all-time highs almost daily, the number of new gold investments on the long side has hardly increased in recent months. Demand continues to come from China and the rally is being completely missed in the West. Nevertheless, we can expect the number of long positions held by non-commercials (funds, large investors) to rise sharply ahead of a longer-term top…

Gold Managed Money Ne

The same picture in silver futures: the number of open long positions on the part of non-commercials has not increased any further. We are far from the euphoria that is usually felt near the tops…

bloomberg CFTC CMX Silver Net

While the situation in platinum looks rather dull, the palladium future looks very exciting: The short positions of the ‘non-commercials’ are coming under increasing pressure: one car company after another is abandoning its major EV plans and demand is collapsing. Shouldn’t palladium demand for catalytic converters then return?

Palladium manged

In copper futures, there is euphoria on the part of ‘non-commercials’ (commercials are usually the mining companies that sell the metals forward, or bullion banks). The long positions have increased quite strongly…

Bloomberg CFTC copper net

However, it is not only the futures positions that are interesting, but also how many futures have been opened by the market makers (open interest). The investment of all futures investors has a market maker as counterparty.

The number of open futures positions has apparently not really increased in gold trading, which once again confirms that demand is coming from China and that virtually no one in the West is involved…

CFTC CEI GOLD total Open inter

In silver futures, demand has recently increased somewhat, but we do not consider this to be euphoric – which would indicate that the rally will soon come to an end…

CEI Silver Total Open

In palladium trading, there seems to be a constant stream of new interest, which is, however, quickly being reduced again. First hesitant investors???

CFT Palladium Total ope

The copper future shows again that, in contrast to gold & silver rally, western investors are very much involved in the copper rally. Of course, demand is coming from electrification and the trend towards less and less supply is being discussed on a daily basis…

High Grade Copper Tot

Also very exciting: We compare what we consider to be the ‘first row currencies’ (US dollar, euro, yen, British pound, Swiss franc) with the cyclical commodity currencies (AUD, NZD, CAD, RUB, MXN, BRL). If investors tend to invest in ‘first row currencies’, a ‘risk-off’ mood can usually be observed in the equity market.

Current developments suggest that the risk-off sentiment should increase…


risk factor in Currency-Futures

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