Commodity Trading Advisors (CTAs) are currently ‘max long’ on both Gold and Silver, but according to TDS commodity analyst Daniel Ghali, the margin of safety for Gold remains vulnerable to algorithmic-driven liquidations. Ghali notes that there are no significant short positions left in the Gold market.
“This development presents the first major challenge to the prevailing narrative that has attracted substantial capital, pushing our positioning metrics to extreme levels on multiple fronts. However, liquidations have been minimal, likely due to ongoing geopolitical concerns, which are preventing accounts from offloading their positions,” Ghali explains.
“Despite what recent price movements might suggest, the past few weeks haven’t seen significant inflows into Gold, based on our positioning analysis. Instead, the market appears to be facing a liquidity gap, with few sellers in the higher price range.”
He adds, “Money manager shorts are now largely connected to Exchange for Physical (EFP) transactions, indicating that there are virtually no directional short positions left in the Gold market. Meanwhile, Silver has a narrower margin of safety against potential sell-offs, but if early signs of reflationary trends persist, Silver and base metals could offer better opportunities.”
