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CoT Highlights:

  • Dollar getting more extreme, euro large specs turn net-short
  • Large speculators turn net-short gold for the first time since 2002
  • Last week short-term capitulation-like price action, maybe a bigger sign?

For a timelier indicator of sentiment in major currencies and markets, see the IG Client Sentiment page.

The latest CoT report continued to highlight a dollar-bullish theme, with large speculators buying the US Dollar Index (DXY) for a 17th week in a row and turning net-short the euro for the first time since the 1st half of last year. Furthermore, the biggest speculators in the futures market collectively turned short gold for the first time since August 2002. Have they given up after all this time, and was last week’s flush-and-reverse a sign that gold may reverse course?

On Friday’s the CFTC releases a detailed report of traders’ positioning in the futures market as reported for the week ending on Tuesday. Outlined in the table below are key stats concerning the positioning of large speculators (i.e. hedge funds, CTAs, etc.). This group of traders largely employ trend-following strategies, and as such, their net long exposure typically increases in uptrends while net short positioning increases in downtrends. When analyzing the data, we take into consideration the direction of their position, magnitude of changes, as well as extremes.

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

CFTC CoT large speculator stats

Large speculators turn net-short gold for the first time since 2002

For the first time in almost exactly 16 years, large speculators turned net-short gold; they did so by a margin of 3.7k contracts, a -16.3k drop in net-positioning from the week before. Perhaps we are seeing the signs of a market throwing in the towel, giving up on a position the trend-followers have collectively held through all the big ups and downs.

It may take some more time for this positioning to have any real meaning as futures positioning is more of a macro indication of sentiment/positioning. But for the near-term we may have at least seen a bottom form last week, as per price action showing signs of capitulation by longs. The strong decline and key-reversal on Thursday point to a market that wants to rally some more in the near-term (perhaps longer). As noted last week, looking for gold to erase its most recent leg lower and rally to around 1210 for starters.

See what fundamental and technical drivers are at work this quarter in the Q3 Gold Forecast.

Gold Large Spec CoT Profile Chart

Gold large spec CoT profile chart

Gold Daily Price Chart (Flush-and-reverse)

Gold daily chart, flush-and-reverse

Large speculator profiles for major FX & markets:

US Dollar Index (DXY)

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Euro

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

British Pound

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Japanese Yen

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Canadian Dollar

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Swiss Franc

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Australian Dollar

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

New Zealand Dollar

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Silver

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Copper

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Crude Oil

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

S&P 500 (E-mini)

CoT Update: Large Speculators Net-short Gold First Time in a Long Time

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX