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[Carlos77]

CFTC CoTs Report: Managed Money Still Driving Prices

 

MARCH 23, 2024  

BY SCHIFFGOLD

 

The Commitment of Traders report is a weekly publication that shows the breakdown of ownership in the Futures market. For every contract, there is a long and a short, so the net positioning will always be zero, but the report shows who is positioned long or short. Historically, Hedge Funds (Managed Money) dominate the price action in both Gold and Silver. That continues to be the case, but it’s possible that there could also be some Hedge Funds looking to stress the Comex by taking physical delivery.

Let’s take a quick look…

 

Gold

 

Below shows net positioning for the 5 main groups of futures holders. Net positioning is still lower than it was throughout most of 2020-2022. That is a good sign the market is not over-bought:

 

 

Managed Money is in complete control of the price action, driving prices higher in recent weeks:

 

 

 

Weekly Activity

They have taken very big long positions in the last two weeks:

 

 

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[Carlos77]

A FINANCIALLY DEGLOBALIZED ERA

 

 CRESCAT CAPITAL

 MARCH 26, 2024

 

Since the early 1980s, the global economy has rejoiced in a long period of significant cooperation among nations in supporting each other’s government financing needs. However, given the growing escalation of geopolitical tensions and the unraveling of longstanding trade partnerships, we believe that the present circumstances are likely to signify the end of an era defined by financial globalization.

 

With few choices to maneuver amidst today’s macro imbalances, developed economies are experiencing an exponential proliferation of their debt problem, propelled by both higher global interest rates and a pressing need for ongoing fiscal spending at extreme levels. Those seeking historical parallels would find that the current surge in sovereign debt issuances is unparalleled. Even during the 1940s, a period characterized by high levels of government debt, there was a degree of stability with the US monetary system anchored to gold. Today’s environment presents a stark contrast. Despite inflationary pressures pervasive in the economy, we are witnessing what might be described as the most undisciplined monetary and fiscal environment in history.

 

Central banks are left with no recourse but to assume responsibility for these challenges, acting as primary liquidity providers to address their own sovereign debt and asset valuation imbalances. Consequently, gold’s role as a universal, neutral asset with millennia of history as money, is experiencing a resurgence relative to US Treasuries for global central bank reserve accumulations.

 

 

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[Carlos77]

China Has Taken Over Gold Price Control from the West

 

BY GAINESVILLE COINS

THURSDAY, MAR 28, 2024 - 15:14

 

The PBoC on an Unprecedented Gold Buying Spree

Covert PBoC gold purchases can be computed by comparing the WGC’s data with what is officially reported by central banks.

 

 

The difference between WGC’s estimated buying and reported buying, arising from the fact that the WGC’s numbers are based on field research, is “largely” created by the PBoC, two industry insiders shared with me.

My estimate is that the PBoC now holds 5,358 tonnes, which is 3,108 tonnes north of what’s officially disclosed at 2,250 tonnes

Estimated annual PBoC gold buying and total holdings. The Chinese central bank is buying gold like never before:

 

 

 

An Explosive Gold Market

Chinese massive gold buying over the past two years have fundamentally changed the gold market. Whereas before 2022 Western institutional supply and demand was driving the price of gold and the price was more or less stuck to the "real yield" (10-year US TIPS interest rate), ever since the war gold has been less sensitive to real yields and follows its own path. This divergence, according to my analysis, has been created by China that has become one of the main driving forces of the gold price.

 

 

 

Turning to the mainland

As the real estate sector in China began crumbling late 2021, Chinese people started changing their gold buying behavior and lost their long-standing sensitivity for the price. One explanation could be that because of capital controls Chinese investors have few places to go other than the local stock market, real estate, and gold. And when the former two are in the doldrums, which is currently the case, the latter attracts more attention.

 

 

 

Shanghai gold premiums

Before 2022, these premiums fell when the price rose and vice versa. Now premiums stay positive during gold rallies. For our analysis we use the uncensored premium on the Shanghai International Gold Exchange, not the manipulated premium on the Shanghai Gold Exchange

 

 

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