Real Pretiorates

Pretiorates observes financial markets and cryptos with open eyes. All tweets are just for information or educational purposes and are no recommendations.

[Thoughts on the Economy & Markets in Charts & Pics @pretiorates]

Pretiorates’ Thoughts – Bond Relief, Bullish Belief

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When Everyone Leaves the Gold Party, Contrarians Check In

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S'thing for contrarians: Open interest shows how many futures contracts are open across all maturities. For gold, this figure has recently fallen to 455,000 contracts. We have now reached the lowest level since 2008.

#gold #silver #preciousmetals

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S'thing for Contrarians: Open interest in Silver futures has now fallen to just under 120,000 contracts—the lowest level since 2009.

#gold #silver #preciousmetals

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But whenever interest in an asset class is particularly low, contrarian investors’ interest rises. In fact, gold’s Power Index has also fallen to its lowest level since October 2023. October 2023—that rings a bell, doesn’t it? Oh yes, that’s right: that’s when the gold price began to rise at a significantly faster pace.

#Gold #Silver #preciousmetals

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The Smart Money Is Shopping in the Gloom

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What if the Market Knows Better?

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The oil market has already reacted to this development with a further price surge. In our annual outlook for 2026, we outlined five unexpected developments—including the comeback of the oil price. In our thoughts from March 4, we also pointed out the high correlation between gold and oil prices, with the oil price tracking the gold price with a lag of about 20 months. At first, it did not look as though this chart would be confirmed again. In the meantime, however, the oil price is indeed well on its way to closing the resulting spread.

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Pretiorates’ Thoughts – What if the Market Knows Better?
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That the oil price will indeed continue to follow the gold price with a 20-month lag is by no means set in stone. The news flow—and especially its gloomy tone—would suggest such a development. Yet the financial markets seem to have a mind of their own on this matter. Yes, the spot price on the oil market has risen sharply since the start of the year. However, an analysis of the futures markets and the various maturities reveals a significantly more nuanced picture: While the spot price of WTI crude has nearly doubled to USD 115 over the past three months, the 12-month forward price stands at just USD 72. The market is essentially telling us nothing other than that it expects the oil price to be around 40% lower in twelve months.

New thoughts have been published!
Pretiorates’ Thoughts – What if the Market Knows Better?
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Clearly, the long-term General Sentiment Indicator has already fallen deep into negative territory. Paradoxically, this is precisely where its positive significance lies: sentiment is already so poor that a large portion of the negative factors is likely already priced in. The indicator has now also fallen to a level similar to that seen during past lows of the S&P 500 Index.

New thoughts have been published!
Pretiorates’ Thoughts – What if the Market Knows Better?
https://t.co/PW6vALa5yM

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Impressive—and likely surprising to many market participants—is the trend in the ratio between cyclical and non-cyclical stocks. Investors typically buy non-cyclical stocks when they want to reduce risk and take a more defensive position. However, the ratio now shows that investors have recently preferred cyclical stocks. But they only do so when they are convinced of an economic upswing… This doesn’t fit at all with current global geopolitical events. But the market’s message is remarkably clear.

New thoughts have been published!
Pretiorates’ Thoughts – What if the Market Knows Better?
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According to a recent analysis, Bitcoin’s price trend is also a good indicator of liquidity —and ultimately of investors’ risk appetite. In recent years, many crypto investors have been convinced that these assets represent an alternative when it comes to managing risk. That may well be true in one form or another. However, developments over the past few months have tended to show that they are primarily a reflection of market liquidity. That is precisely why they are also a useful indicator for the rest of the financial markets, particularly for the stock markets.

New thoughts have been published!
Pretiorates’ Thoughts – What if the Market Knows Better?
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Central banks are, of course, primarily responsible for market liquidity. A comparison of global M2 money supply trends with the S&P 500 Index confirms that a correlation exists—provided M2 is given a three-month lead time. It takes some time for new liquidity to be invested and thus have an impact on financial markets. The positive message from this chart: The money supply has recently risen again, which should be a positive signal for equity investors.

New thoughts have been published!
Pretiorates’ Thoughts – What if the Market Knows Better?
https://t.co/PW6vALa5yM

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Incidentally, the positive message regarding liquidity trends also applies to crypto investors, who have recently been through such a tough time: The expansion of global M2 should actually lead to cryptos soon completing their correction phase.

New thoughts have been published!
Pretiorates’ Thoughts – What if the Market Knows Better?
https://t.co/PW6vAL9xJe

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The Sell-off May Be Running Out of Sellers

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The General Sentiment Indicator measures various ‘short-term inputs’ and has actually already reached a level that, in the past, often occurred precisely when a significant low formed on Wall Street.

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In fact, Smart Investor Action also shows that slow accumulation is already taking place behind the scenes again. This is an interesting indication that the moment may have arrived when equity investments should no longer be reduced, but rather built up…

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And yes, even hedge funds have now rebuilt a net long position in stocks…

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Sentiment in the Shanghai gold market: extremely pessimistic…

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Another sentiment indicator with multiple inputs also signals that a buying opportunity could currently be forming in the gold market in the medium term…