The top traders on the Shanghai Futures Exchange (SHFE) are once again heavily investing in gold, according to Daniel Ghali, Senior Commodity Strategist at TD Securities.
Surge in Gold Long Positions
“After a month’s pause in buying activity, the top traders on SHFE are rapidly increasing their gold positions, nearing the all-time highs set in the first quarter of 2024,” Ghali noted. “This resurgence is particularly noteworthy as it coincides with a trend of divestment from domestic gold ETFs, indicating that retail traders are not driving this rally as they did earlier in the year.”
Over the past five trading sessions, these top traders have added over 10 tons of gold, primarily through new long positions. This influx of investment is mirrored by discretionary traders increasing their positions in Comex gold, driven by factors including the so-called Trump trade and expectations of an upcoming rate-cutting cycle.
Support from Commodity Trading Advisors
Commodity Trading Advisors (CTAs) are also contributing to the bullish momentum. “Our simulations of future scenarios suggest that CTAs are likely to purchase both gold and silver in most scenarios this week,” Ghali explained. “The flow of investments continues to support upward momentum in gold prices.”
This renewed interest from institutional traders highlights a significant shift in market dynamics and suggests continued strong performance for gold in the near term.
