Gold and Bitcoin Rallye
Gold and Bitcoin prices both remain massively supported by easing financial conditions and a bunch of liquidity in the market. While the Fed Funds Rate remains high at 5,5% - liquidity conditions in the market is what really matters for both safe haven assets.
Meanwhile, J.P. Morgan announced that gold is their number one pick in the commodities market. According to them, the price has room to rise towards $2.500.
So far the digital version has the upper hand over the old analog as this chart by Bloomberg highlights. Gold ETP net outflows have amounted to roughly $20 billion on a one-year basis to March 13 vs. Bitcoin.
Meanwhile, the total Bitcoin ETP AUM is at about $73 billion and is rapidly catching up to gold ETP AUM at around $185 billion.
CTA Positioning Update
UBS expects that CTAs selling pressures on agriculturals should ease going forward - although overall positioning will remain negative.
'Contrarian' trades according to UBS: bullish metals (both precious and industrials), bearish Oil and Coffee
'Go with momentum' trades according to UBS: bullish Lme Tin, Cattle Feeder, Live Cattle, and Gold, bearish Wheat
“Agriculture remains bifurcated as bearish sentiment in the grain sector is still bearish while supply-side risks in soft commodities persist. However, the positioning of market participants in future already reflect these dynamics”
This analysis by UBS fits recent market behavior. CTA positioning and expected flows can work as a confirmation for identifying trend continuations and reversal patterns in markets.
In Other News…
This week look out for the following:
FOMC Meeting and Fed Funds Decision on Wednesday (consensus is that the Fed will hold rates at 5,5%)
Flash Manufacturing and Service PMI on Thursday
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Till next Monday, Lukas
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Cocoa over 8000