Traders were cautious with USD, gold, VIX ahead of the election: COT report

View the latest commitment of traders reports

Market positioning from the COT report – Tuesday, 5 November 2024:

The latest COT data shows us market positioning up to the close of the day of the US election, and therefore will not show us how traders reacted to the results
Traders were net-long USD futures (in aggregate) for a fifth week heading into the election
Asset managers continued to pile into long VIX bets ahead of the election, pushing net-long exposure to a 2-year high
Both sets of traders derisked from gold and silver futures by trimming longs and shorts
Large speculators increased net-short exposure to JPY futures to a 14-week high, speculative volumes increased for a fifth week
Dovish bets for the BOC and RBNZ saw large speculators increase their net-short exposure to NZD/USD futures to an 11-week high and CAD futures a 12-week high
Yet AUD/USD bucked the commodity FX trend with large speculators increasing net0-long exposure to a four-week high, although shorts were reduced at a faster pace than longs ahead of the election
Gold and silver traders reduced net-long exposure for a second consecutive week

US dollar positioning (IMM data) – COT report:

The USD index increased for a sixth week and formed a bullish engulfing candle. Positioning was a little hesitant to overcommit to USD longs before the election, as the week-over-week change among all futures contracts was effectively flat. Yet traders are clearly bullish on the USD overall, even if large speculators were only marginally net-long by 95 contracts. I suspect they will close the gap with asset managers in coming weeks to increase their net-long exposure.

JPY/USD (Japanese yen futures) positioning – COT report:

Traders continued to pile into short yen bets heading into the election, with asset managers and large speculators increasingly gross-short exposure for a fifth week. Trading volumes between the two sets of traders also increased for a fifth week to show some conviction behind yen weakness. But with odds of a BOJ hike increasing and the potential for the yen to regain safe-haven demand for Trump 2.0, we may find that upside potential for USD/JPY could be capped or even enter some sort of a retracement in then coming weeks.

Commodity FX (AUD, CAD, NZD) futures – COT report:

Softer economic data and dovish expectations of the RBNZ and BOC allowed asset managers and large speculators to increase their net-short exposure to NZD and CAD futures. Both sets of traders increased shorts and trimmed longs to show conviction behind the bets, although price action shows that after a multi-week selloff bearish momentum is waning. Bears therefore may want to tread with caution, while allowing for headline risk surrounding trade relations with the US.

Metals (gold, silver, copper) futures - COT report:

It seems gold and silver traders were right to be wary of extended gains heading into the US election, with net-long exposure felling for a second week. The shooting star week which formed on god futures was the perfect prelude to last week’s post-election selloff, and a correction is now underway. And with Trump driving headlines and US data generally outperforming more than not, it keeps hawkish pressure on the Fed, which supports yields and the USD to the detriment of gold. And where gold goes, silver tends to follow.

Positioning for copper was essentially unchanged, but then it hasn’t had the luxury of a strong rally before this point. Traders will want to keep a close eye on China data this week to see if stimulus has began to make an impact on the economy, alongside US-China relations going forward.

WTI crude oil (CL) positioning – COT report:

Positioning for WTI crude oil was bullish heading into the election for several reasons. While both sets of traders remained net-long, they both trimmed shorts and increased longs, while overall speculative volume also increased. Specifically, large specs reduced gross shorts by -11.5% (-15.3k contracts) and increased longs by 10.1% (29.9k contracts). It will be interesting to see how this plays out with Trump returning to the Whitehouse if production increases, as this could essentially cap gains if supply exceeds demand. WTI crude oil is -2.5% lower from Tuesday’s close.

Wall Street indices (S&P 500, Dow Jones, Nasdaq 100) positioning – COT report:

The bullish outside days which formed on all three Wall Street indices confirms that the re-off approach before the election has been overturned. Net-long exposure among asset managers decreased across all three indices before posting their strong gains in the second half of the week. While bullish momentum waned as we approached the weekend, I suspect dips are more likely to be bought than not.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.