Gold and oil shorts covered, copper shorts increased - TDS

According to the CFTC Weekly Report (W/E July 10), as the WTI crude oil spiked toward $75/bbl amid fears of supply shortages and low spare capacity, which prompted speculators to modestly decrease their net length, as some shorts were covered, but more longs were convinced to take profits as they saw this as a top of the range.

Key Quotes

“With crude prices falling some 4% on the week, we suspect that money managers likely aggressively liquidated their length in crude this week.”

“Copper traders continued to aggressively decrease their net length and increase their shorts as the Trump Administration's retaliatory tariffs significantly escalated trade battle with China.”

“While prices extended their freefall, money managers opted to increase their shorts on the downtrend, with only a few willing to attempt to catch this falling knife.”

“Reacting to a weakening USD, moderating US short term rates and a spike in prices, speculative investors covered shorts and increased their long exposure to gold.”

“But, it seems that another DXY rally amid global trade angst this week, along with continued weakness on the Chinese currency front has again created an environment which has driven gold down into the $1,230s. This likely means that the increase in net long positions may have been somewhat reversed.”