Gold bugs are falling like dominoes. Economists at TD Securities highlight that the yellow metal could suffer a major capitulation event.

Price slump catalyzes massive CTA shot acquisiton program 

“We see evidence that the steepest outflows from broad commodity funds since the covid crisis may be catalyzing a series of cascading liquidations from various speculative groups. This argues for substantial downside for gold in coming sessions as participants are forced to sell in a vacuum.”

“Indiscriminate selling by broad commodity funds has weighed on price action in gold. Moreover, it has likely catalyzed a massive CTA selling program as trend followers respond to deteriorating momentum.”

“We have cautioned that the substantial size accumulated by proprietary traders during the pandemic appears complacent. In a liquidation vacuum, these positions are now vulnerable.”