USD/JPY, AUD/USD, Gold Analysis: COT report

The latest Commitment of Traders (COT) report highlights key shifts across AUD/USD, USD/JPY, and gold futures. Speculators trimmed bearish exposure to the Australian dollar at the fastest pace in more than four years, suggesting sentiment may be turning. Positioning in the Japanese yen remains divided, with both gross-longs and gross-shorts increasing as traders balance Fed rate cut bets with political uncertainty in Japan. Meanwhile, gold futures saw strong inflows, with large speculators and managed funds boosting net-long exposure alongside a technical breakout, reinforcing the bullish case for precious metals.

View related analysis:

Charts prepared by Matt Simpson - data source: CME, LSEG

Weekly COT Report Highlights: AUD/USD Shorts Ease, JPY Futures Mixed, Gold Bulls Advance

US Dollar (USD): Net-short exposure fell -0.5 billion to -$5.6 billion last week
European dollar (EUR): Asset managers were their most bullish since January 2024
British pound (GBP): Asset managers and large speculators increased their net-short exposure for a second week
Japanese yen (JPY): Gross-shorts among large specs reached a 7-month high
Australian dollar (AUD): Large specs reduced gross-shorts at their fastest pace in 4.5 years
Canadian dollar (CAD): Net-short exposure rose by 4k contracts
New Zealand dollar (NZD): Gross-shorts rose for a sixth week among both sets of traders
Gold (GC): Net-long exposure rose by 54.8k contracts between managed funds and large specs

AUD/USD Positioning: Australian Dollar Futures – Weekly COT Report Analysis

There was a notable round of short covering in AUD/USD futures last week, as markets increasingly acknowledge that the Reserve Bank of Australia (RBA) is unlikely to cut its cash rate any time soon. Both inflation and growth have surprised to the upside, while surveys show improving confidence among consumers and businesses. Household spending and the labour market also remain resilient.

Large speculators reduced their gross-short exposure at the fastest pace in 4.5 years, while asset managers cut theirs at the quickest pace in two years. Positioning remains heavily net-short on the Australian dollar, but with back-to-back Fed cuts now being priced in, I expect further reductions in short exposure in the weeks ahead.

Chart prepared by Matt Simpson - data source: CME, LSEG

JPY/USD Positioning: Japanese Yen Futures – Weekly COT Report Analysis

In recent weeks I have outlined my case for yen bulls to regain traction, though the resignation of Japan’s PM weakens the case for BOJ hikes. SO whiled the US dollar could weaken on Fed-cut bets, the potential bearishness of USD/JPY may be limited if BOJ hikes really are off the table. Furthermore, if US data continues to deteriorate, the US dollar could gain a safe-haven bid which could work in the favour of USD/JPY bulls.

This means that we may need to take the rise of long bets in favour of the Japanese yen may need to be taken with a pinch of salt. And perhaps more attention should be paid to the rise of gross-shorts to the yen among large speculators.

Chart prepared by Matt Simpson - data source: CME, LSEG

Gold Futures Positioning (GC): Weekly COT Report Analysis

Gold bulls enjoyed a convincing breakout last week from a triangle continuation pattern. Traders were already positioning ahead of the move, with the latest COT data showing large speculators increasing net-long exposure by +35.2k contracts and managed funds by +19.6k contracts. Since positioning is not yet at a sentiment extreme, the setup still favours dip buyers, suggesting gold bulls are likely to continue seeking opportunities on pullbacks.

Chart prepared by Matt Simpson - data source: CME, LSEG

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.