Commodities

Gold is knocking on the door of record highs heading into what has recently been an extremely strong period for bullion prices. But having rallied so hard since early October, it comes across as being priced for perfection near-term.

When yen bulls increase their long exposure by 40% in a week, it is probably worth noting. Especially when large speculators had pushed net-short exposure to a 6-year high the week prior. Every turning point must start somewhere, and I continue to suspect this turning point already has.

A softer US dollar has helped AUD/USD and gold push towards key technical levels, suggesting the near-term price performance may determine their longer-term trajectory as we head towards 2024.

Gold faces an interesting start to the week with the US dollar falling to fresh two-month lows ahead of a key US Treasury auction, the latter providing an obvious catalyst that could dictate whether we see a retest of resistance above $2000.

EUR/USD bears continued to trim shorts while large speculators added to longs. Whilst this might not be a bullish bet on the strength of Europe, it may well be a bet against the US dollar. And with the 2-year note holding above key support and shorts being trimmed, it hints at lower yields and a weaker US dollar.

In a week when there’s little market moving macroeconomic events scheduled, fresh US Treasury auctions are likely to steal the spotlight. Yield sensitive assets such as gold and USD/JPY will be paying particularly close attention.

While AUD/USD and WTI are two separate assets, their underwhelming performance recently is undeniably linked: global economic growth concerns are intensifying.

It’s noticeable how liquid cyclical assets have not been able to extend the rally sparked by the soft US CPI report for October, including crude oil which is struggling to muster a bid.

It seems a combination of short covering and fresh initiation of longs helped AUD/USD enjoy its best week of the year last week, just a few weeks after large speculators hit a record level of net-short exposure. The same could likely be said for the Dow Jones which also reached a record level of net-short exposure. WTI crude oil failed to capitalise on the risk-on vibe and fell for a second week.

Huge day for S&P 500, sweet spot for fixed income investors, AUD/USD perking up while Japan win big with timely bond auction.

With US bond yields down hard, Apple earnings out soon and the technical picture changing rapidly, you don't many more import market moments for the S&P 500 and gold than this.

USD/JPY intervention warnings escalate, PBOC's record push against market forces, USD King for a reason and US real yields push higher before Treasury refunding announcement. Gold is struggling in the difficult environment.

No weekend hangover for US stock futures, bonds calm before BOJ, AUD/USD breaks downtrend while iron ore breaks higher.

Large speculators were net-short GBP/USD futures for a fourth week and by their most bearish level in six months, with gross shorts rising to a 52-week high. The S&P 500 broke a key trendline last week as asset managers piled into shorting the E-mini index futures. WTI fell in line with last week's bias but may have found support over the neat-term. And investors piled into gold for a second week - ahead of gold's break above $2000.

Amazon delivers, crude gains on renewed skirmishes, Australian inflation expectations jump while Tokyo price pressures turn up the heat on BOJ.

Crude oil's grip on markets, AUD/USD hammered as RBA rate hike bets slashed, BOJ faces important choice as USD/JPY tops 150 while Nasdaq 100 rally faces it's moment of truth. Gold continues to glisten despite the tough environment.

Australia inflation too hot to ignore, China confidence remains elusive, Hang Seng traders receive a gift while something is up with Japan's bond market.