Traders drop their XAU/USD and XAG/USD positions – TDS

Top traders on the Shanghai Futures Exchange (SHFE) have reduced their net Gold (XAU/USD) and Silver (XAG/USD) positions. Precious metals investors are likely to remain on the sidelines for the time being, TDS commodity strategists note.

Precious metals remain on the sidelines

“Top traders on the SHFE have reduced their net Gold and Silver positions by 8.6k and 11.6k lots respectively over the course of this past week. This, along with a macro cohort that has yet to find their bullish conviction on the Yellow Metal, helps explain the relatively weaker price action this week.”

“Elsewhere, the PCE data came in roughly in line with expectations, and the pace represents the lowest level of the cycle. Overall, inflation data continues to gradually normalize back to the trend the Fed would like to see, but it is still not enough evidence for officials to pound the table on policy easing.”

“In this sense, precious metals investors are likely to remain on the sidelines for the time being, however there has been nascent signs the ETF positions could be starting to turn a corner with holdings on course to post their first monthly increase since May 2023.”