Despite new all-time highs, macro funds actually liquidated some Gold length last week, TDS’ Senior Commodity Strategist Daniel Ghali notes.

Macro fund buying activity is a critical to the upswing in prices

“Outflows from Western macro funds likely coincided with the sharp rise in the dollar at the turn-of-the-week. Interestingly, although the broad dollar sharply reversed by Tuesday, macro funds had failed to reacquire their lost length by then, whereas concurrent CTA buying activity over the past week more than offset liquidations from this cohort.”

“Importantly, this left macro funds with additional ammo to chase the rally in Gold prices. Considering that CTAs effectively hold their 'max long' position size and that risk parity funds' deleveraging risks are limited by the diversification benefit offered to stocks by bonds, macro fund buying activity is a critical component to the continued upswing in prices.”