Gold Market Outlook: Why Prices May Continue to Rise
Despite gold’s strong rally in recent months, experts say the precious metal remains underowned by major investors—even though it appears overbought on the surface. According to market analysts, futures open interest on the CME is nearing extreme lows, typically seen at major price bottoms.
“The market views gold as a crowded trade, but data shows it’s actually under-owned,” says a strategist at TD Securities.
This unusual mismatch is surprising, especially as the U.S. dollar faces challenges as a global store of value. Gold’s recent price surge isn’t driven by traditional demand factors, but rather by a growing lack of trust in fiat currencies.
💡 What’s Driving the Gold Rally?
The rally is less about physical demand and more about market sentiment and systemic shifts. Analysts believe:
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CTAs (Commodity Trading Advisors) are poised to buy gold in any scenario this week
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Algo-driven buying already accounts for +4% of their maximum position size
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This could spike to +30% as we approach the upcoming U.S. Non-Farm Payroll (NFP) report
Such flows could provide sustained momentum to gold prices in the short term.
🧠 Positioning Suggests More Upside
Even with macro hedge funds largely neutral on gold, other indicators support a bullish case:
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Selling pressure from ETFs is easing
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CTA flows are increasing
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Historically, low open interest levels often lead to strong forward returns
If market sentiment shifts again—as it often does during volatile geopolitical or macroeconomic phases—another buying wave could be triggered this summer.
