Gold prices (GOLD) are trading nearly 0.8% higher today, benefiting from a weaker U.S. dollar and a tight physical market. Demand for bullion on COMEX remains very high, as investors increasingly opt for physical delivery to vaults. A historically expensive stock market, potential Fed policy easing this year, weaker U.S. macroeconomic data, uncertainty surrounding White House policies and trade wars, as well as heightened geopolitical tensions, are additional drivers of inflows into gold.
- On the other hand, large commodities speculators have cut their bullish positions in COMEX gold contracts to the lowest level in 36 weeks (since July 2024). Currently, open interest on COMEX is approximately 100,000 contracts below the mid-January peak. However, the spot market remains tight, as U.S. investors are actively transferring physical bullion from London to New York.
- As of the end of the first week of March, the total open interest in COMEX gold futures and options was only 4% above its 10-year average, suggesting that speculative interest in the market is not approaching record levels. For comparison, during the Covid pandemic in 2020, open interest was about 30% higher than today's levels. The Swiss metal refining group MKS Pamp estimates that gold prices could reach around $3,200 per ounce this year.
GOLD (D1 Interval)
Gold is trading within a long-term upward price channel, and it appears that a downward impulse could be triggered around $3,050–3,100, where gold is expected to test the upper boundary of the channel. The current scale of the rally is 1:1 comparable to the two previous upward impulses. Meanwhile, the U.S. Dollar Index (DXY) is testing the 103 level and is slightly declining, while 10-year and 2-year Treasury yields are hovering around 4.3% and 4.03%, respectively.
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Source: xStation5
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