Gold prices briefly hit record high over $3,500/oz on fiscal, tariff concerns
Investing.com -- Bank of America said systematic investors known as commodity trading advisers (CTAs) have been adding to long positions in the Russell 2000 and EURO STOXX 50 futures, while already extended positions in the S&P 500, Nasdaq 100 and Nikkei 225 remain intact.
Positioning in major equity indexes could increase further if realized volatility continues to decline. Stop-loss triggers for these trades are still more than 2% away, and price trends are not expected to deteriorate in the near term.
In fixed income, CTAs rapidly increased long positions in 10-year and shorter-dated US Treasuries as yields fell this week, though the pace of buying is likely to slow.
Bank of America said next week’s US non-farm payrolls report could be pivotal in shaping bond positioning ahead of the Federal Reserve’s Sept. 17 meeting. Outside the US, CTAs could sell German Bunds and Chinese government bonds, with positioning in Bunds already tilted short.
In currencies, the brokerage said trend followers are likely to add to British pound and Australian dollar positions next week, even as they remain stretched long the euro and Mexican peso. The US dollar rose slightly this week.
In commodities, CTAs continued to buy soybean and soybean meal futures despite recent declines, as earlier price drops rolled out of short-term trading models.
Positions in soybeans are mixed, while soybean meal remains net short. Meanwhile, gold longs remain elevated after recent gains, with short-term buyers potentially re-entering.
Separately, Bank of America noted that S&P 500 options market gamma has surged in recent weeks, reaching its highest levels since February. Near-term contracts have been the main driver, though the bank said the trend of rising gamma has been clear.