CFTC Weekly Report (W/E Apr. 02) - TDS

Analysts at TD Securities noted that firming growth expectations, a strong USD and a robust level of risk appetite in global equity markets prompted money managers to aggressively cut their net exposure to gold last week:

"Investors cut long exposure as the prospects for a sustained rally faded amid growing optimism that there will be a continued inflow of funds in risk markets. At the same time, a drop in prices amid a modest popup in yields convinced traders to takeout new shorts, as prices neared technical levels which could be conducive to additional downside. For now, firm US data and well performing equities should keep investors away from the yellow metal, which should also see range bound price action."

"Speculators grew their net length in copper, likely in response to a string of data beats which gave the impetus for money managers to add to their longs as global growth concerns moderated. Notwithstanding the green shoots in the data and positive supply-side developments, with a notable deterioration in the situation at Las Bambas, prices failed to break meaningfully above the $6500/t range and fell towards $6,400/t — which continues to lend support to our view that the balance of risks rests to the downside in the priced-for-perfection copper market."

"Speculators added marginal WTI crude oil length, as both longs and shorts added to their positions. Indeed, stronger-than-expected data out of China eased the markets fear of a major slowdown, lifting one major demand side worry. This, in combination with the ever-present OPEC+ cuts and the return of geopolitics to the forefront, with fighting in Libya and growing rhetoric surrounding Iran sanction waiver renewals led WTI to move materially higher, likely seeing shorts attempt to call a top. But, as TD Commodity Strategy predicted a few months ago, WTI crude moved towards $64/bbl, and we would not be surprised to see this trend continue beyond these highs."