Contrarian bullish setup emerges for gold
The speakers argued that gold is presenting a contrarian upside setup as sentiment and positioning have swung to bearish extremes.
The argument
The discussion highlighted that CTA positioning in gold has collapsed to the first percentile on a one-year lookback, while the six-month put-to-call skew has reached near ten-year highs. This extreme bearishness follows a period of peak retail enthusiasm, signaling a potential sentiment reset.
The thesis, stress-tested
✓ What validates it
- ✓CTA positioning reversing upward from the first percentile
- ✓Put-call skew normalizing from 10-year highs
▸ Risks discussed
- ▸Heavy government intervention in markets can prolong volatile swings
- ▸Continued momentum-driven selling by CTAs
Hear it yourself
"Because if liquidity is tightening and we're seeing credit spreads just putts along lows, which allows this CapEx cycle to keep going. But if the dollar starts breaking things elsewhere in the world, you'll get that, you know, reverse carry trade. So I think that's the main catalyst I'm watching here from a macro basis, but I don't know. I I I kinda like less jawboning from the Fed. I joked around on Twitter last night that, this guy actually wants free markets. We'll see we'll see. But there's a great chart I put on Twitter where it was like, the amount of words in fed fed releases for the past, like, basically fifteen years, it was just like a parabolic rise of, like, fed communication, which I called vault volatility stiflers."
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