How much further can the bounce in Gold prices run? Any way you slice it, this is not the same set-up for flows as a few short months ago, TDS’ Senior Commodity Strategist Daniel Ghali notes.

Gold price may continue its downward movement

“Pent-up selling activity unleashed by the US elections, resulting in a massive shift from the liquidity vacuum that enabled a melt-up in prices. While macro funds have already liquidated nearly 60% of their extreme net length, they are now unlikely to rebuild an extreme position given a vastly different outlook for the Fed, with a discounted path that is no longer expected to lead to an 'overly easy' policy stance.”

“CTA liquidations have been modest thus far, which conversely suggests that a further uptape will only be supported by a modest reversal in CTA flows. ETF investors show little sign of reaccumulating thus far. Shanghai traders are undergoing their most significant round of liquidations in years. Overall, our flows-based analysis still doesn't suggest we've seen the lows in Gold prices thus far.”