According to TD Securities analysts Ryan McKay and Bart Melek, Commodity Trading Advisors (CTAs) are increasingly entrenching their net long positions in gold, supported by renewed discretionary demand and expectations that the Federal Reserve will remain on hold amid weaker economic data and rising energy prices [1]. This environment is expected to keep gold prices supported at the upper end of their current range, with nearby CTA triggers anticipated to result in only minimal shifts in positioning, indicating growing support for systematic positions [1].
The report also highlights that silver is attracting near-term systematic flows, with a price break above $66.80 per ounce likely to spur further buying activity [1]. Pricing simulations suggest that CTAs could add another 2-5% of their historic maximum length in gold positions under all pricing scenarios into the following week [1].
Overall, the analysis points to a stable and supportive backdrop for gold, driven by both systematic and discretionary demand, while silver could see additional upside if key technical levels are breached [1].
CONCLUSION
The expectation of a Fed pause is reinforcing systematic and discretionary demand for gold, with CTAs likely to maintain or modestly increase their long positions. Silver may also benefit from further buying if it surpasses the $66.80/oz threshold, suggesting continued investor interest in precious metals.