“Money managers decided to aggressively cut their longs and build new short exposure, after it became apparent that the Fed intends to continue to target modestly restrictive monetary policy amid a tight labor market,” point out TD Securities analysts.
Key quotes
“A firm USD, weakening CNY and higher yields across the curve were very important factors persuading specs to reduce gold length.”
“However, now that the equity market has given up considerable value, 10 year yields slid materially below 3.20% and the USD lost some of its luster, the recent jump above $1,200 suggests investors may be more willing to build net long exposure.”
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