Metals: Gold’s 5% rally following the Fed’s latest bailout only helped attract 10k lots of fresh net buying. Perhaps a sign that the CTA section of speculators did not find enough support from other markets to justify adding additional length. Despite reaching a fresh 7-year high the net at 199k lots was 30% below the recent peak on February 25. The lack of short positions, just 6k lots versus 205k longs, will be a concern to those holding long positions, should the current correction extend beyond support at $1650/oz.
Another week of net-selling reduced the silver net-long to a ten-month low at just 15k lots. While flows, predominantly retail, into silver-backed ETFs have jumped and set new records following the March slump, hedge funds are worried about silver’s historical troubled relationship with recession. A theme that was highlighted by the IMF last week when they said the world faces worst recession since the Great Depression of the 1930’s. A theme that also saw copper being net-sold despite rallying on China and Fed news.