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According to the CFTC weekly report (W/E July 17), speculators have continued to shun gold amid a resilient USD and emerging market FX angst as the PBoC continues to allow the CNY to depreciate to offset economic headwinds in China, notes the research team at TD Securities.

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“In response, money managers continued to reduce their net length, bringing net positioning near the lows as they continued to aggressively add to their shorts and cover some longs this week. However, we believe the dollar’s best days are behind us, and expect that Presidential talk of currency manipulation could be the catalyst needed for a robust reversal.”

“President Trump’s announcement of an additional $200 billion worth of proposed tariffs against China gave copper and its base metal peers another jolt lower last week. Indeed the latest round of trade fears saw specs lightening their exposure once again, with the red metal touching below $6000/t late this week.”

WTI crude oil specs reduced net length again this past week, liquidating more longs relative to shorts that were covered. A host of bearish headlines focused on a return of Libyan supply, Saudi offering more crude to Asian buyers and potential SPR sales, along with talk of Iran sanction relief, all culminated in crude trading some $8/bbl lower from highs just above $75/bbl.”