Gold: CTA selling limits upside below $4,400 - TD Securities

TD Securities’ commodity strategists report that Gold is holding gains after weaker US jobs data reduced perceived Fed hike risks, but CTAs (Commodity Trading Advisors) are unwinding length. They argue that with energy prices rising again, the stagflation narrative must strengthen for Gold to rally further, and note that prices need to exceed $4,400/oz for CTAs to re-add length.

CTAs trim exposure despite support

"Precious metals hit pause. The yellow metal is holding gains after the weaker jobs numbers further questioned the probability of coming Fed hikes."

"However, with energy prices grinding higher again, the stagflation narrative will need to solidify to see gold follow suit."

"For now, Asian appetite from top SHFE traders and continued ETF inflows offer support."

"CTAs on the other hand have begun unwinding length, with prices needing to top $4,400/oz to add back the length."