It would appear as if the new week is starting out with an increase in economic uncertainty with protests in Hong Kong shutting down the Hong Kong airport and China threatening to ban an international airline unless it can ensure its employees are not protesting against the Chinese government.
However it would also appear as if predictions of an unending US/Chinese trade battle producing a global recession are on the rise again. There are also concerns from the currency war front with market fears of a precipitous decline in the yuan ahead which some market participants feel will fall sharply despite Chinese central bank efforts.
The markets also saw predictions that gold would reach $1600 an ounce in the coming six months with those predictions accompanied by the heaviest fund investment in gold since 2016. Apparently Goldman Sachs thinks gold will hit $1,600 in six months while Citi indicated gold could rise to that level in 6 to 12 months.
Expanding investment interest in gold is also reconfirmed by holdings in global exchange traded gold funds which reached the highest level since March 2013. In fact gold ETF's increased their gold holdings for the 10th straight day last Friday bringing net purchases this year to 6.12 million ounces.
Silver ETF's added 1.79 million ounces bringing this year's net purchases to 82.3 million ounces.
While some traders will suggest gold has lost momentum and forged a triple high at the end of last week, it is difficult to discount the triple threat of macroeconomic orientated bull factors.
The Commitments of Traders report for the week ending August 6th showed Gold Managed Money traders net bought 53,717 contracts and are now net long 285,082 contracts. Gold Non-Commercial & Non-Reportable traders hit a new extreme long of 378,681 contracts after increasing their already long position by 51,258 contracts.
Silver positioning in the Commitments of Traders for the week ending August 6th showed Managed Money traders were net long 49,538 contracts after decreasing their long position by 15,789 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 8,063 contracts to a net long 80,681 contracts.
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