Metals: A correction in the dollar and real yields saw gold drop by 4.5% in the week to August 28. Hedge funds and other large speculators responded to this correction and cut bullish bets by 11% to 138,339 lots, an 11-week low. Silver which lost 6.4% during the week meanwhile managed to attract fresh buyers and short covering resulting in the net long rising by 19% to 37,578 lots.
The HG copper net long reached a fresh 24 month high as speculators used the price correction to cut short position while maintaining their bullish exposure, potentially a sign that copper’s month long rally has further to go.
Latest: Spot Gold (XAUUSD) & Spot Silver (XAGUSD) start the week near a two-week high after Fed Chair Powell said nothing last week to hurt the current bullish narrative. Bloomberg reports that the $16 billion Ohio Police and Fire Pension Fund have joined Warren Buffett’s recent move into gold. It has approved a 5% allocation to gold to help diversify and to 'hedge' against inflation. The big question remains how many funds will follow over the coming months, thereby potentially creating an additional layer of support. Renewed weakness in real yields and a softer dollar has helped underpin the markets this Monday with the overall range for gold still between $1900/oz and $2015/oz. Silver meanwhile continues to challenge $28/oz resistance which potentially could see it challenge XAUXAG support at 69.40.
HG Copper meanwhile trades back above $3/lb near its highest since mid-2018. This following supporting economic data overnight from China, the world's biggest consumer. The LME in London is closed today due to a U.K. public holiday.