The canary in the coal mine was gold and silver which despite dollar strength and the attempted rally among pro-cyclical commodities saw continued strong buying. In our Commodity Weekly from Friday titled “Gold is in the midst of a perfect storm” we highlighted the reasons why precious metals continue to attract buyers.
The gold net-long jumped by 24%, the equivalent of nearly $9 billion nominal, to 284k lots while funds increased the silver long by 22% to 68k lots, a 30-month high. Gold’s accelerated rally to a seven-year high in the days following the reporting period is likely to have taken the net-long above the previous record of 292k lots. With total holdings in ETF’s backed by bullion also hitting record highs, the combined ETF and fund long reached a record of 112 million ounces last Tuesday.