Highlights:

  • Large speculators offload huge amounts of precious metals contracts, highlighted by a record one-week change in gold
  • Oil speculators continue to add to record net-long, euro closing in on a record
  • Pound large specs went net-long recently, may prove to have been another untimely flip from short

The CoT reportis a long-term indicator, for short-term sentiment check out the IG Client Sentiment page.

The most recent CoT report showed big changes again in the positioning profiles of large speculators trading gold & silver, while position sizes in oil and the euro continue to press historical bounds. GBP traders may have recently made an untimely flip in positioning yet again.

Every Friday the CFTC releases the Commitment of Traders (CoT) report, providing a breakdown of open interest in the futures market for the week ending on Tuesday. In the table below, we’ve outlined key statistics for net positioning of large speculators (i.e. hedge funds, CTAs, etc.). This group of traders are largely known to be trend-followers. The direction of their position, magnitude of changes, as well as extremes are taken into consideration when analyzing how their activity could impact future price fluctuations.

Key stats: Net position, one-week change, and where the current position stands relative to the 52-week range.

CoT key statistics

Gold & Silver – record one-week changes in back-to-back weeks

Gold: The change in large speculators’ positioning made a record shift in the most recent report. Their net-long was reduced by a whopping 66k contracts just a week after seeing a reduction of 51k contracts. At 107k total contracts the total position is by no means small yet, but the rush out the door hints at capitulation-type selling, but we may see some more before a floor is put in.

Gold w/Large Speculators’ Positioning

Gold w/futures positioning

Silver: The report the week before showed a record change (-27k) in positioning, but with another 21k reduction in large speculators’ net-long, their position is quickly declining towards the zero-line. Each time it has neared zero over the years, silver carved out a low soon after. The stampede to liquidate coupled with long-term support not far below (2003 trend-line) could set up an oversold scenario into support and be conducive for a large bounce to develop in the not-too-distant future.

Silver w/Large Speculators’ Positioning

Silver w/futures positioning

Silver Weekly Chart

Silver weekly price chart

Crude Oil - speculative long makes another record, euro long growing towards record size

Crude oil: Large specs’ net-long grew for the 8th week in 9, continuing to extend into record territory. At 614k contracts it’s massive and suggests the market may be running out of speculative buying pressure to continue pushing oil higher. But until price action agrees with such a notion we must respect the current uptrend. Keep an eye on the slope since summer, it’s receiving a lot of attention as support and is proving to be increasingly pivotal for oil’s outlook.

Crude Oil w/Large Speculators’ Positioning

Crude oil with futures positioning

Crude Oil Daily Chart

US Crude Oil daily chart

Euro: Large speculators are holding 113k contracts long, nearing the 2007 record of 119 contracts. Just as the case is with oil, it hints at the possibility of speculative buying running out. However, the euro has held steady despite an impressively persistent long positon. Keep an eye on support around 11700 and the November low in the mid-11500s, these levels, if broken, could cause an unwinding of longs in EUR/USD.

Euro w/Large Speculators’ Positioning

EUR/USD w/futures positioning

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EUR/USD Daily Chart

EUR/USD daily price chart

British Pound - large spec long builds for another week, may prove to be untimely again

British Pound: Large speculators established a net-long position three weeks ago for only the third time since late-2014. The other two instances – October 2015 and more recently, October of this year – both proved to be untimely returns to the long-side. The chart of GBP/USD still gives the benefit of the doubt for longs as a choppy trend remains in place. However, a break of trend-lines rising up from March and April would be the first of signs that the bullish sequence is breaking. A drop below 13000 would be needed, though, to create a lower-low.

British Pound w/Large Speculators’ Positioning

British pound w/futures positioning

GBP/USD Daily Chart

GBP/USD daily price chart

Large speculator positioning profiles for major markets:

US Dollar Index (DY) w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

Japanese Yen w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

Swiss Franc w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

Canadian Dollar w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

Australian Dollar w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

New Zealand Dollar w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

Copper w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

S&P 500 w/Large Speculators’ Positioning

CoT: Analysis on Changes in Positioning for Gold, Oil, Euro & GBP

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---Written by Paul Robinson, Market Analyst

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