According to TD Securities senior commodity strategist Daniel Ghali, discretionary traders are making a significant return to the Gold (XAU/USD) market. This group has amassed its largest position of this cycle, indicating a strong interest in the yellow metal.
Ghali highlights that macro trader positioning in Gold is currently larger than expected, given the number of Federal Reserve rate cuts anticipated over the next year. Despite this, current holdings remain well below the peaks seen in previous Fed cutting cycles, suggesting potential for further gains if expectations for rate reductions deepen.
In addition, discretionary longs have been building in recent weeks, influenced by the “Trump trade,” which has spurred additional interest in Gold.
From a technical standpoint, Gold is showing strong performance on TD Securities’ Global macro radar, indicating a high threshold for Commodity Trading Advisors (CTAs) to liquidate their positions. While recent downward movements in Gold have prompted some sell-offs, CTAs are likely to resume buying unless there is a significant drop below $2,370/oz.
