Gold Price Slips $5 But 2019 Rate Outlook 'Supports', Hedge Funds Slash Bearish Betting on Comex

GOLD PRICES gave back a $5 rise in US Dollar terms after recovering last week’s closing level in London on Tuesday, trading down at $1244 per ounce as world stock markets rallied, government bond prices edged back, and the British Pound steadied on the FX market after Monday’s latest Brexit-crisis slump.
Stabilizing above $1.26 in US Dollar terms, Sterling held the UK gold price in Pounds per ounce above £990, some £6 shy of yesterday’s 14-month high.
Prime Minister Theresa May meantime met European Union leaders to try and renegotiate the Irish “backstop” – the open-ended commitment to EU rules which forced her to cancel Parliament’s “meaningful” vote on her Brexit deal for fear of a crushing defeat.
Data released overnight showed hedge funds and other speculators slashing their bearish betting on Comex gold futures and options last week.
As a group, the so-called Managed Money category made the fastest positive jump in its positioning since those traders pulled back from a record-heavy bearish position in mid-October.
Chart of Managed Money net Comex gold futures and options position. Source: BullionVault via CFTC
Hedge funds also slashed their bearish betting against silver last week, cutting the net negative position by 30% to a 4-week low.
Silver prices over that period rose 1.4% as gold added 0.7% in US Dollar terms.
The price of platinum in contrast continued to fall, losing 3.7% over the week-ending Tues 4 December as the Managed Money slashed what had been a net positive position very nearly to zero.
“Platinum pricing remains heavy underneath $800,” says a trading note today from MKS Pamp, the Swiss refiners and finance group, “and it is difficult to see and drivers for a move back above the figure.”
Over on the interest-rate market, speculators have meantime slashed their betting on 3 or more US Fed rate hikes by this time next year from 59.8% to just 16.1% likelihood according to data from the CME  futures exchange.
Next week’s widely expected rate hike to a ceiling of 2.50% “will be the last one for a long time” reckons Paul Tudor Jones of the $4bn Tudor Investment Corp.
“Fed funds futures pricing,” agrees Chinese-owned bullion bank ICBC Standard’s analyst Marcus Garvey, “has been reducing the market expectations for hikes over the next 18 months and that has been coming through in a slightly softer Dollar and a stronger gold price.”
Over in India gold priced in the weakening Rupee rose Tuesday back towards October’s 27-month highs – costing INR 32,650 per 10 grams after accounting for the No.2 gold consumer nation’s 10% bullion import duty – as opinion polls said the ruling BJP Party is facing its biggest regional election defeat since leader Narendra Modi become Prime Minister in 2014.
A Canadian ex-diplomat was meantime arrested today in No.1 gold miner, importer and private consumer China, reportedly in a tit-for-tat response to the Toronto court hearing for extradition to the United States of tech-giant Huawei executive Meng Wanzhou.


This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.

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