Gold Prices Outperform Silver, Crude Oil Bulls Eye OPEC - COT Report

COT Report: Gold, Silver, Crude Oil, Copper Analysis & News

• Gold Price Outperforms Silvers,
• Crude Oil Bulls Eye OPEC Meeting
• Copper Net Shorts Ease
• The Predictive Power of the CoT Report

Gold: In the week to February 25th, investors had reduced their gross longs in the precious metal by a modest 2%, while shorts were cut by 20%. Consequently, net positions were left relatively unchanged as gold prices moved to just shy of the $1700 level. However, this provides little insight into Friday’s drop in gold, which posted its largest daily drop since 2013.

That said, the reason for the fall in the precious metal had been due margin call induced liquidation in gold, in order for market participants to offset losses, which typically takes place in times of market panic. This had been the case during the financial crisis from March to October 2008, before monetary stimulus propelled gold higher. As such, with markets pricing in coordinated central bank stimulus, gold may yet again shine bright. Elsewhere, silver net longs had been cut by 8% as shorts rose 10% in a week that saw silver post its largest weekly decline in 7-years, in which the gold/silver ratio soared to over 95.

Oil: Speculators marginally increased their net longs in Brent crude oil for the first time in 5-weeks, however, the sizeable selling in the crude complex after February 25th, which saw Brent crude briefly break below $50/bbl may have likely seen crude oil longs liquidated. Elsewhere, oil bulls will be hoping for support stemming from deeper OPEC+ production cuts at the March 5th meeting.

Copper: Speculative net shorts had eased for a second consecutive week as gross longs grew by 3%. However, with shorts largely unchanged, the recent downside momentum in the base metal appears to be slowing down, while money markets continue to aggressively price in central bank easing.

Current Positions

Source: CFTC, DailyFX (Covers up to February 25th, released February 28th)

Oil Price Chart and Positions

Gold Price Chart and Positions

Silver Price Chart and Positions

Copper Price Chart and Positions

*Long & Short positions are adjusted for open interest

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX