Weekly COT Report: Gold Bugs Retreat Just Off Record Highs

A summary of the weekly Commitment of Traders Report (COT) from CFTC to show market positioning among large speculators.

As of Tuesday 1st October:

  • Bullish exposure on the USD was at $17.5 billion ($20.5 billion against G10 FX)
  • Overall, only minor adjustments were made to FX majors on a weekly basis
  • Net-long exposure to the USD index (DXY) hit a 2.5 year high
  • Net-short exposure nudged its way to a fresh record high, although fuelled by a close of longs and shorts

DXY: By Tuesday’s close, net-long exposure to DXY was its highest in 2.5 years. It’s 1-year Z-score was over +2 standard deviations foe the first time in 12 months. There were also 5.5 long contracts to every short, although this ratio actually peaked at 6.3 two weeks prior. However, this marketed the swing high and DXY has since retraced from its peak, so these metrics will be a little less stretched. From a price action perspective, DXY remain within a bullish channel and the its structure remains bullish above 98.6 so whilst this level holds, we favour a break to new highs.

As of Tuesday 1st October:

  • Net-long exposure to gold was reduced by -11.6%
  • Platinum traders reduced net-long exposure by 10.5%
  • Bullish exposure to palladium hit a 3-month high

Gold: Gold bulls closed 47.6k long contracts last week, their largest weekly reduction since December 2017. This saw net-long exposure drop by 11.6%. Incidentally, the report (which was compiled on 1st October) marked the swing low on Gold. It’s also worth noting that net-long exposure was near record highs ahead of the bullish reduction. (The record high was in 2016). Whilst we’ve observed stretched positioning and warned of a potential inflection point, geopolitical tensions and weak economic data has proven too difficult to build a bear case for the yellow metal. But if those supportive features were to be removed, it then opens up the potential for a deeper correction. For now, gold could remain stubbornly near its highs and trade within a range. 

Palladium: Traders have remained net-long on palladium since 2003. However, whilst prices remain at record highs, net-long exposure isn’t flagging a sentiment extreme with 1 and 3-year Z-score at +1.3 and -0.2 standard deviations respectively. Until price action suggests otherwise, palladium appears favourable to trend traders (or those seeking to buy dips).


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.