Gold Demand Data Confirms Economic Rebound // Latest CTA Positioning Calls from UBS
The Commodity Report #140
Gold Demand Data Confirms Economic Rebound
Last week the World Gold Council published its figures for the fourth quarter of 2023. Gold demand for technology, electronics and other industrial use cases continued to improve in nominal and YoY terms - pointing to an economic rebound.
“Technology demand proved another surprising element in 2023, churning out stellar growth in Q4, albeit from a low base. Guidance from major chip manufacturers suggests 2024 will be a bumper year for semiconductors, with the AI sector a major contributor. As such, technology demand is likely to be somewhat insulated from high prices and a slowing global economy.“ the report stated.
CTA Positioning Calls from UBS
Latest CTA positioning according to UBS: CTAs are bullish Brent and Low Sulphur Gasoil (with more buying forecasted) and on the other hand bearish Soybean Meal, Soybean and Corn (with more selling forecasted).
Additionally UBS expects CTAs to buy industrial metals in size and consider taking some profits in “long gold vs. short silver”.
Contrarian trades remain bullish oil and industrial metals and on the other hand short gold and coffee.
OPEC+ holds still till April
A key OPEC+ advisory committee on Feb. 1 made no recommendations on production policy, in effect keeping current output cuts in place. The next JMMC meeting was set for April 3, just after the latest series of OPEC+ production cuts are set to expire, while the full OPEC+ coalition is scheduled to meet in person in Vienna on June 1.
The current OPEC+ production quotas involve a series of overlapping output cuts implemented since October 2022, with the group's most recent meeting in November 2023 resulting in an agreement for some 2.2 million b/d of voluntary cuts by Saudi Arabia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman through the end of March.
The S&P and VIX in Election Cycles
This week look out for the following:
ISM Services PMI on Monday
WASDE Report on Friday
A subscription costs $29 a month, and you will receive an additional in-depth report every Sunday evening at 6:00 PM CEST. Moreover - you will receive a quarterly economic growth report as well. That information will only be published to members and not the general public.
Till next Monday, Lukas
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