1. Executive Summary
On 2025-01-27, the commodities complex came under broad selling pressure, led by a sharp energy reversal. Natural gas (NG=F) was the worst performer, settling at 3.6970, down 8.19% on the day and 6.36% over five sessions, while crude oil (CL=F) fell 2.00% to 73.1700 and Brent (BZ=F) dropped 1.81% to 77.0800. Precious metals also weakened: gold (GC=F) settled at 2737.5000, down 1.43%, and silver (SI=F) at 30.2540, down 2.48%. Base metals followed, with copper (HG=F) at 4.2035, down 2.02%, and soybeans (ZS=F) at 1045.0000, down 1.02%.
The macro backdrop remains restrictive. According to the latest macro data, the US 10-year TIPS real yield stood at 2.1300% and the 10-year nominal yield at 4.5300%, while the DXY index was 107.3400. The 10y-2y spread was 0.3600%, unemployment 4.0000%, and the Fed funds effective rate 4.3300%. The high-yield credit spread was 2.6600%, and the Fed's overnight reverse repo balance was USD 92.863 billion. The VIX index was 17.90.
CFTC data as of 2025-01-21 showed gold net long at 215,869 contracts (+20,247 w/w), crude oil net long at 247,445 (+11,203), copper net long at 19,314 (+4,749), natural gas net long at 47,899 (-8,961), and silver net long at 29,221 (-122). EIA data for the week of 2025-01-24 showed crude inventories at 415,126 thousand barrels (+3,463 w/w), gasoline at 248,855 (+2,957), distillate at 123,951 (-4,994), and refinery utilization at 83.50%.
The primary risk factor for today is the combination of elevated real yields, a firm dollar, and crowded long positioning in gold and crude, which leaves both exposed to further long liquidation.
2. Overnight Market Recap
Gold (GC=F) settled at 2737.5000 on 2025-01-27, down 1.43% on the day. The session opened at 2761.1001, reached a high of 2762.2000, and printed a low of 2737.5000, closing at the session low. The 20-day high stands at 2792.0000 and the 20-day low at 2597.0000, with the close at 72.10% of the 20-day channel. Five-day performance was -0.25% and 20-day performance +3.74%. The ATR was 28.1429. The close below the pivot of 2745.7333 and below S1 of 2729.2666 signals intraday weakness.
Silver (SI=F) settled at 30.2540, down 2.48% on the day, with five-day performance of -2.25% and 20-day performance of +0.69%. The 20-day high is 31.6750 and the 20-day low 28.9400, placing the close at 48.00% of the 20-day channel. The ATR was 0.5603. The gold/silver ratio stood at 90.48.
Crude Oil (CL=F) settled at 73.1700, down 2.00% on the day, with five-day performance of -6.05% and 20-day performance of +5.10%. The session opened at 74.5400, reached a high of 75.1500, and printed a low of 72.3800. The 20-day high is 80.7700 and the 20-day low 69.4400, placing the close at 32.90% of the 20-day channel. The ATR was 2.2350. Brent (BZ=F) settled at 77.0800, down 1.81%, with five-day performance of -4.59% and 20-day performance of +5.21%.
Natural Gas (NG=F) settled at 3.6970, down 8.19% on the day, the largest decliner in the complex. Five-day performance was -6.36% and 20-day performance -0.48%. The session opened at 3.7850, reached a high of 3.8270, and printed a low of 3.6090. The 20-day high is 4.3690 and the 20-day low 3.3300, placing the close at 35.30% of the 20-day channel. The ATR was 0.3143.
Copper (HG=F) settled at 4.2035, down 2.02% on the day, with five-day performance of -3.09% and 20-day performance of +3.23%. The 20-day high is 4.4120 and the 20-day low 3.9745, placing the close at 52.30% of the 20-day channel. The ATR was 0.0561. The copper/gold ratio stood at 0.001536.
Soybeans (ZS=F) settled at 1045.0000, down 1.02% on the day, with five-day performance of +1.06% and 20-day performance of +5.77%. The session opened at 1050.0000, reached a high of 1051.0000, and printed a low of 1040.0000. The 20-day high is 1076.2500 and the 20-day low 974.7500, placing the close at 69.20% of the 20-day channel. The ATR was 19.9286.
Across the broader agricultural complex, corn (ZC=F) settled at 482.0000, down 0.92%; wheat (ZW=F) at 535.5000, down 1.56%; soybean meal (ZM=F) at 300.8000, down 1.34%; and soybean oil (ZL=F) at 45.0000, down 0.49%. Livestock was mixed, with live cattle (LE=F) at 205.6750, up 0.44%, and lean hogs (HE=F) at 83.0500, up 0.91%. Softs were mixed: coffee (KC=F) at 349.2000, up 0.47%; sugar (SB=F) at 19.1700, up 0.79%; and cotton (CT=F) at 67.2700, down 0.50%. Platinum (PL=F) settled at 946.9000, down 1.12%, and palladium (PA=F) at 963.6000, down 3.76%.
3. Macro Landscape
The macro landscape on 2025-01-27 remains characterized by restrictive real rates and a firm dollar. According to the latest macro data, the US 10-year TIPS real yield stood at 2.1300%, a level that historically has been associated with headwinds for non-yielding assets such as gold. The 10-year nominal yield was 4.5300%, while the 10y-2y spread was 0.3600%, remaining in positive territory and consistent with a soft-landing rather than recessionary pricing.
The DXY index was 107.3400, and the firm dollar mechanically weighs on dollar-denominated commodities. The Fed funds effective rate was 4.3300%, and the Fed's total balance sheet stood at USD 6,831,760 million as of 2025-01-22, reflecting the ongoing quantitative tightening trajectory. The overnight reverse repo balance was USD 92.863 billion as of 2025-01-27, a key gauge of liquidity in the financial system.
Inflation data showed the unadjusted CPI index at 318.9610 as of 2025-01-01, and the core PCE price index at 124.5870, the Fed's preferred inflation anchor. The labor market remains resilient, with non-farm payrolls at 158,268 thousand and the unemployment rate at 4.0000%. Credit conditions appear contained, with the BofA high-yield credit spread at 2.6600%, well below crisis thresholds.
Equity futures were firm, with S&P 500 futures (ES=F) at 6046.7500 and Nasdaq 100 futures (NQ=F) at 21258.5000, suggesting risk appetite remains intact. The VIX index was 17.90, indicating moderate but not elevated volatility. The combination of firm equities, a firm dollar, and elevated real yields creates a challenging environment for commodities, particularly for gold and base metals. No Fed, ECB, or BOJ policy updates were available in the data for this report.
4. Fund Positioning - CFTC
According to CFTC Commitments of Traders data as of 2025-01-21, positioning across the commodities complex remains net long but with notable dispersion.
Gold net long positioning stood at 215,869 contracts, comprising 226,964 long and 11,095 short, with a weekly increase of 20,247 contracts. This is the largest weekly build among the tracked markets and reflects strong speculative conviction. The long-to-short ratio is exceptionally elevated at approximately 20.5:1, a configuration that historically signals crowded positioning and vulnerability to long liquidation.
Crude Oil net long positioning was 247,445 contracts, comprising 285,606 long and 38,161 short, with a weekly increase of 11,203 contracts. The long-to-short ratio of approximately 7.5:1 indicates a constructive but less extreme positioning than gold. The build in net length occurred even as prices declined over the subsequent sessions, suggesting recent longs may be underwater.
Copper net long positioning was 19,314 contracts, comprising 69,678 long and 50,364 short, with a weekly increase of 4,749 contracts. The long-to-short ratio of approximately 1.4:1 is the most balanced among the tracked markets, indicating less crowding.
Natural Gas net long positioning was 47,899 contracts, comprising 191,688 long and 143,789 short, with a weekly decrease of 8,961 contracts. The reduction in net length preceded the sharp 8.19% decline on 2025-01-27, suggesting some participants had already begun reducing exposure.
Silver net long positioning was 29,221 contracts, comprising 48,244 long and 19,023 short, with a weekly decrease of 122 contracts. Positioning was essentially unchanged week-over-week, with a long-to-short ratio of approximately 2.5:1.
In aggregate, the data show that gold and crude oil carry the most crowded long positioning, while copper and silver are more balanced. The contrarian signal is most pronounced in gold, where the extreme long-to-short ratio and the largest weekly build coincide with a sharp daily decline on 2025-01-27.
5. Today's Focus
No economic calendar entries were available in the data for 2025-01-27. The following focus points are derived from the available data.
First, the energy complex remains the center of attention following the 8.19% decline in natural gas and the 2.00% decline in crude oil. According to EIA data for the week of 2025-01-24, crude inventories rose by 3,463 thousand barrels to 415,126 thousand barrels, gasoline inventories rose by 2,957 thousand barrels to 248,855 thousand barrels, and distillate inventories fell by 4,994 thousand barrels to 123,951 thousand barrels. Refinery utilization stood at 83.50%. The build in crude and gasoline inventories is a bearish input, partially offset by the distillate draw.
Second, the precious metals complex is in focus after gold's 1.43% decline and silver's 2.48% decline. The gold/silver ratio at 90.48 remains elevated, and the copper/gold ratio at 0.001536 reflects a risk-off tilt within the metals complex.
Third, the macro backdrop of a 2.1300% real yield and a 107.3400 DXY index remains the dominant cross-asset driver. Any further firmness in the dollar or real yields could extend the pressure on commodities.
6. Technical Outlook
Gold (GC=F): The close at 2737.5000 is below the pivot of 2745.7333 and below S1 of 2729.2666, a bearish short-term configuration. The 20-day channel position is 72.10%, with the 20-day high at 2792.0000 and the 20-day low at 2597.0000. The ATR of 28.1429 implies a daily range of approximately 1.0% of price. Resistance is at R1 of 2753.9666, and support is at S1 of 2729.2666. The trend over the 20-day window remains positive (+3.74%), but the five-day performance of -0.25% and the daily decline of 1.43% suggest momentum is fading. A sustained break below S1 could open the path toward the 2700 area, while a reclaim of the pivot would stabilize the tone. Given the crowded CFTC long positioning, the risk of further long liquidation is elevated. Stance: avoid chasing; await stabilization near support.
Crude Oil (CL=F): The close at 73.1700 is below the pivot of 73.5667 but above S1 of 71.9834. The 20-day channel position is 32.90%, with the 20-day high at 80.7700 and the 20-day low at 69.4400. The ATR of 2.2350 implies a daily range of approximately 3.1% of price. Resistance is at R1 of 74.7534, and support is at S1 of 71.9834. The 20-day trend remains positive (+5.10%), but the five-day performance of -6.05% shows a sharp pullback. The bearish inventory build reported by the EIA adds fundamental pressure. A break below S1 could target the 70 area, while a reclaim of the pivot would signal stabilization. Stance: sell rallies toward R1, with a stop above the pivot.
Copper (HG=F): The close at 4.2035 is below the pivot of 4.2135 but above S1 of 4.1920. The 20-day channel position is 52.30%, with the 20-day high at 4.4120 and the 20-day low at 3.9745. The ATR of 0.0561 implies a daily range of approximately 1.3% of price. Resistance is at R1 of 4.2250, and support is at S1 of 4.1920. The 20-day trend is positive (+3.23%), but the five-day performance of -3.09% and the daily decline of 2.02% indicate weakening momentum. The more balanced CFTC positioning (long-to-short ratio of approximately 1.4:1) reduces the risk of a positioning-driven cascade relative to gold and crude. Stance: neutral; range-trade between S1 and R1.
7. Cross-Asset Monitor
The cross-asset picture on 2025-01-27 is dominated by the firm dollar and elevated real yields. The DXY index at 107.3400 and the 10-year TIPS real yield at 2.1300% create a dual headwind for dollar-denominated commodities. The gold/silver ratio at 90.48 is elevated, reflecting gold's relative outperformance over silver, consistent with a risk-off tilt within the metals complex. The copper/gold ratio at 0.001536 is low, reinforcing the same signal.
The oil/gold ratio stood at 0.0267, and the crack spread (3-2-1) was 18.06, indicating refining margins remain positive despite the crude pullback. The WTI-Brent spread, implied by CL=F at 73.1700 and BZ=F at 77.0800, was approximately USD 3.91, with Brent at a premium.
Within the energy complex, the divergence between crude oil (-2.00%) and natural gas (-8.19%) was pronounced, with natural gas underperforming significantly. The distillate crack remains supported by the 4,994 thousand barrel draw in distillate inventories reported by the EIA.
Equity futures were firm, with ES=F at 6046.7500 and NQ=F at 21258.5000, and the VIX at 17.90, suggesting that the commodity selloff was not accompanied by broad risk aversion. This divergence suggests commodity-specific drivers, including positioning and inventory data, rather than a macro risk-off event.
8. Risk Factors
1. Crowded long positioning in gold and crude oil. CFTC data as of 2025-01-21 showed gold net long at 215,869 contracts (+20,247 w/w) and crude oil net long at 247,445 (+11,203). Further long liquidation could extend losses.
2. Elevated real yields and firm dollar. The 10-year TIPS real yield at 2.1300% and the DXY at 107.3400 remain headwinds for commodities.
3. Bearish energy inventories. EIA data for the week of 2025-01-24 showed crude inventories up 3,463 thousand barrels and gasoline up 2,957 thousand barrels, with refinery utilization at 83.50%.
4. Natural gas volatility. The 8.19% daily decline in NG=F, with an ATR of 0.3143, signals elevated volatility that could persist.
5. Credit and liquidity conditions. The high-yield credit spread at 2.6600% and the overnight reverse repo balance at USD 92.863 billion bear monitoring for any signs of liquidity stress.
9. Week Ahead
No economic calendar entries were available in the data for the next five trading days. Based on the available data, the following items warrant monitoring.
Energy markets will continue to digest the EIA inventory data for the week of 2025-01-24, which showed crude inventories at 415,126 thousand barrels (+3,463 w/w), gasoline at 248,855 (+2,957), distillate at 123,951 (-4,994), and refinery utilization at 83.50%. The next EIA release will be a key input for crude and refined products.
The CFTC Commitments of Traders report for the week ending 2025-01-28 will be released and will provide an updated view of positioning, particularly whether the gold and crude net longs were reduced following the 2025-01-27 declines.
Macro data to monitor includes the trajectory of the 10-year TIPS real yield (currently 2.1300%), the DXY index (107.3400), and the 10y-2y spread (0.3600%). Any Fed communication will be closely watched given the Fed funds effective rate of 4.3300% and the balance sheet at USD 6,831,760 million.
No OPEC+ or central bank meetings were indicated in the data for the week ahead.
10. Trading Desk Summary
- Gold (GC=F): Settled 2737.5000, -1.43%. Below pivot (2745.7333) and S1 (2729.2666). Crowded CFTC long (215,869 net, +20,247 w/w). Avoid chasing; watch S1 for stabilization.
- Silver (SI=F): Settled 30.2540, -2.48%. Gold/silver ratio 90.48. Positioning balanced (29,221 net, -122 w/w). Neutral.
- Crude Oil (CL=F): Settled 73.1700, -2.00%. Below pivot (73.5667), above S1 (71.9834). EIA crude build of 3,463 thousand barrels. Sell rallies toward R1 (74.7534).
- Natural Gas (NG=F): Settled 3.6970, -8.19%. Largest decliner. ATR 0.3143. Elevated volatility; reduce size.
- Copper (HG=F): Settled 4.2035, -2.02%. Range between S1 (4.1920) and R1 (4.2250). Balanced positioning. Neutral.
- Soybeans (ZS=F): Settled 1045.0000, -1.02%. 20-day trend +5.77%. Watch 20-day low at 974.7500.
Key macro levels: DXY 107.3400; US10Y 4.5300%; TIPS real yield 2.1300%; VIX 17.90; 10y-2y 0.3600%.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.