➡ The Arcadia Economics talks about how the U.S. Treasury Department experienced a major cybersecurity breach, which is believed to have been carried out by Chinese hackers. This breach involved a third-party software service provider, Beyond Trust. In other news, the market trends for gold, silver, and copper are being closely watched as they could influence the market’s direction in the new year. Lastly, there’s a focus on the positioning of commodities, with a noted trend towards a potential catalyst.

➡ The article discusses various market trends, including the shift of investments from stocks to bonds due to anxieties about trade and the Federal Reserve’s policies. It also mentions a tragic plane crash in South Korea and the impact of cold weather on natural gas prices. The article ends with a discussion on gold and silver prices, suggesting that despite a decrease in open interest, gold prices remain high, while silver prices may attract more selling if stocks sell off.

Chinese hackers breach U.S. Treasury. The U.S. Treasury Department disclosed a significant cybersecurity breach attributed to a Chinese state-sponsored actor. The intrusion, described as a, quote, major cybersecurity incident, involved a third-party software service provider, Beyond Trust. Nice name, right? Incorporated, according to a letter sent to Congress and reviewed by Bloomberg News. Welcome to the Morning Markets and Metals with Vince Lancey, where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now, here’s Vince. Good morning. I’m Vince Lancey. It’s New Year’s Eve. Yesterday, the Department of Treasury, the U.S.

Treasury, was hacked by Chinese hackers. And the second story we’ll be covering is mostly in premium, and that’s an update on the retail positioning for gold, silver and copper headed into the new year. That cohort could be a catalyst for any initial directional bias that the market has going into the new year. So, the title is, is Janet Yellen a hack? Yes. Is Janet Yellen a hacker? No, but didn’t stop us from implying that. Okay, here we go. Starting with the markets. Here’s the first page. You can enjoy a lovely picture. 10 yields are 4.52, down 1.

The dollar is 108.17, up 9. This would be 559.22, up 19. The VIX is 16.93, down 48. Gold is 26.11, up 5. Silver is 28.88, down 5, almost. Copper is 4, spot 0, down 5, that’s over a percentage point. WTI is 71.30, down 10. I think it was a little stronger before. Natural gas is 384, giving back some, down 3%, after being up, I think, 20% yesterday, at least 15, 13 cents. Bitcoin, 94, spot 400. Wild intraday ride yesterday, up 1700. Ethereum, 33, 92. Palladium, 900. Up 2 and change. Platinum, 902. Up 1 and change. Gold, silver, now above 90.

Silver. Again, they’re selling more silver when stocks are weak. It’s going to happen. And grains are all up anywhere between 20 basis points and a percentage point. Okay, front page. Chinese hackers breach U.S. Treasury. Free to all. That actually is a legitimate coverage of what happened yesterday. Humorous picture aside. Quick note, China’s playing the U.S. dollar in gold. We’re going to be building out on that next year, next week, after I do a little bit more reading. And silver, another step higher in 2025. We’re happy to report that after we put this up on the 29th or 28th, banks have, not banks, other news agencies have been putting out their own versions of it with far inferior content.

Let’s put it that way. Not even a chart, you know? All right, so moving on. Chinese hackers breach U.S. Treasury. The U.S. Treasury Department disclosed a significant cybersecurity breach attributed to a Chinese state-sponsored actor. The intrusion described as a, quote, major cybersecurity incident involved a third-party software service provider beyond trust. Nice name, right? Incorporated, according to a letter sent to Congress and reviewed by Bloomberg News. Now, we have the full story there written by us originally covered after researching the Bloomberg News, et cetera, et cetera. But at the bottom, we have more lovely, fictitious artist renderings of Janet Yellen in short hair, long hair, at a state dinner with her boss, Xi Jinping, and dancing with him.

Anyway, those are special for premium at the bottom. I think all in all, about 15 pictures. So there might be something in there that you can giggle at. All right. Next, it’s actually a significant story. On the other hand, it’s also nicely timed. It’s just nicely timed. Main story. Retail, gold, silver, and copper positioning says we’re not there yet. That’s our headline. Bank of America notes CTA’s are ending 2025, stretched long U.S. dollar, short bonds, and they are somewhat long U.S. large cap equities. There are stretched long U.S. dollar positioning positions, followed by bond shorts. Equity longs in the U.S.

remain intact, but are not stretched entering 2025 as equity vol is elevated and as well equity price trend is not fully long. There is almost no commentary from Bank of America on commodities, and that makes sense because there’s really little positioning to speak of as a potential catalyst for move right now. But there is trend in the positioning towards a catalyst. So it’s not like they’re just sitting on their hands. They’re putting trades on. Now, it’s important to note that, you know, as the end of the year comes, people will say, well, people to close their books down.

CTA’s generally are in and out. They don’t really stop because it’s futures. So if you’re trading futures, your P&L is what it is on the last day of the year. And they get in and out of positions all the time. They just so happen to not be exposed to precious metals very much. They have reasonable but nothing big in energy. They have, I’d say, very big positions in treasuries, which may or may not move the market. They are lopsided long in currencies in the dollar, specifically, I think, against the Canadian dollar right now. And they are somewhat long in stocks.

So this chart here you’re looking at, we have a whole package for you to look at. But we’re going to go through two charts for you here now. And in the premium section at the bottom, we’ll stay on the video and we’ll go through how we read these and give you a little bit more insight into the implications. All right, so precious metals before November 27, 2024, there was 14 billion in longs and now there are 10 billion. So again, disinvestment in precious metals nets. That’s a reflection of, let’s say, gold and silver, platinum and palladium.

They’re long gold, but they’re actually now short silver. Not as short as we’d like them to be, but they are short silver. In energy, they’ve paired their shorts from down 26 billion to down 17 billion. That’s not to say they’re reducing shorts across the board. See, they’re really still short oil. They’ve just gotten long natural gas. So there’s a seasonality play here going on, weather season, I should say, and the CTAs are now getting long natural gas and they’re making money, right? And then my guess is they’re going to be long heating oil, though I haven’t seen it yet.

Base metals have flipped, not flipped, gone from minus 11 billion short to minus 18 billion short. That’s good for precious metals. We’ll come to that in a second. Livestock. I don’t really have any insight to give you there. Grains. Grains have been very big in their flows, largely because wheat is now a geopolitical crop. And if it’s more geopolitical, then that will affect plantings of other commodities. Soybeans are geopolitical as well. Let’s be fair about that. All right. Next chart. So here’s three charts here. I’m going to touch on what they mean right now and then get into more detail and premium.

Gold is well balanced, slightly long. If the market drops, the lungs will puke. If the market rallies, the momentum FOMO types will add. We are approaching a market that’s almost underbought for gold. Well, it is underbought, but more significantly underbought. Copper. This is your copper positioning when you’re looking at a market that’s being traded by people that are worried about the economy. Some of these are CTAs in America selling it against potential Fed rate cut backing off. Some of these are hedging their stock positioning in general, almost like selling copper, like buying a put. And some of these are traders looking at Asia, specifically China, and saying they’re not doing enough.

I’m going to keep getting short copper. Now, all these reasons I’m giving you are after the fact reasons for some of these guys. Some of these guys are just momentum oriented. But as momentum and statistical and algorithmic as they claim to be, the reasons that I’m giving you are the reasons they even think that way. Silver. You’ll notice silver looks more like copper than it does gold graphically. Well, that’s because silver is being shorted like it’s an industrial metal now. The the we’ll get into what the lines mean specifically, but I’ll just say this. If you’re looking at copper compared to silver, which is what I’m doing right now, the difference is.

The red line, I want you to notice first. The red line in copper is flat. That means if the market drops, there isn’t much more money that they have allocated to sell it. On the other hand, if silver were to drop, there is more money, not a lot more money, but more than copper. You can see how much selling will come into gold. So the point is that they’re pretty much done selling copper now. And now they’re selling more silver, which eventually means in a rally, both of these metals will rip. And that’s what you’re looking for here.

So, you know, pursuant to the title, are we there yet? No, we’re not. All right. More again, more at the bottom. News and analysis. Chinese hackers breach U.S. Treasury. Let’s click on that so you can see the full story. It’s a full legitimate story. Humorous picture aside. There you go. The agreement on gold. That’s the comment that I’ve been making about China and the U.S. Hartnett’s bear scenario updated. I want to revisit this because it’s kind of playing out. Not fully, but kind of playing out when stocks are weak as they were yesterday and bonds are strong as they were yesterday and haven’t been strong for a while.

That’s a sign that some longs are exiting for whatever reason. Anxiety about Trump trade ending, anxiety about Fed not easing, just wanting to book profits for the end of the year. There are all kinds of different reasons converging on the same behavior. Well, when they do that, some of those people will take their money and put it into cash. You’ll see the bond market percolate higher so the yields will come in and that will also be consistent with a market that’s scared of recession. And then if that continues, the dollar will strengthen usually. If that continues, you’ll start to see the dollar roll over and drop.

Now, continues during the day, perhaps. Continues during the week, perhaps. Continues over a month long period. Yes. So those are signs that you don’t want to buy a dip. If you don’t see the dollar being very strong and you actually see bonds getting stronger as stocks are dropping, that’s usually a sign to not buy a dip in this environment. Now, that could all change, but that’s the behavior that we’re looking at. Founders AM. Happy New Year. That’s from yesterday. Goldfix Sunday reading. Plenty to read in there. We did that already. Equity recap. U.S. equities are treated on Monday, but the S&P 500 NASDAQ comp ended the year up 23.8% and 29.1% respectively.

Large caps, small caps, S&P 500, et cetera, et cetera. Market news. There’s the story as covered by us. There was a tragic accident yesterday. Actually, investigators are trying to figure out what caused a Jeju air flight to Bellyland without its landing gear down at Muhon International Airport in southwestern South Korea, killing all but two of the 181 people on board as it burst into flames in a nation’s worst air disaster in decades. Now, the plane that they flew on, Boeing has rightfully been getting a lot of criticism for their safety problems, but the type of plane used on the flight is mainstay and it’s one of the most commonly used airplanes with a strong safety record.

So it’s not necessarily a Boeing problem, but it’s certainly not helping their situation. Here’s Natural Gas Futures. You may as well, we’ve talked about this. I may as well give you the official CNBC story on it. Natural Gas Futures prices surged Monday, hitting a new 52-week high, following reports of a colder-than-usual temperature outlook for January. Natural Gas Futures. February Futures rose 15% during the session after an updated outlook by the weather company and the atmospheric G2 released some days showed that the temperature forecast for next month is expected. It’s expected to be colder than average in the east, specifically from Florida to Maine, as well as certain parts of the Great Lakes.

Okay, give you a little breakdown on that. First, as an observation, I think there’s people that are thinking about what happened in Texas a couple years ago when they had a freeze down there. And so that’s spooking some people into it. You have a lot of people that are short oil, and so they’re probably buying natural gas against it. They may buy heating oil against it. And also, we do have a legitimate cold front that’s coming in, so we’re getting some good old-fashioned winter weather coming in. Now, as far as trading, if you’re saying, oh, I should buy natural gas, well, you can if you want.

I’m not going to stop you. But keep this in mind, more than almost any other commodity in the world, that grains may be more like this on time, but more than any other commodity in the world. When natural gas spikes because of weather, the spot market will spike. The futures will trail, but the spot market spike is usually short-lived. So do not, if you want to buy natural gas to buy it, go ahead, buy it, right? But if you look at spot and say, oh, spot went up 35%, but futures only went up 15%, that’s right.

You may look at that and say, oh, futures are undervalued relative to spot. They should catch up a little bit. That’s a hazardous way of thinking as someone who’s lived it. Natural gas spikes, while they can be huge, don’t really translate into futures that much because natural gas is a heavily consumed commodity. You use it or you lose it. It’s very much a spot market with a futures market attached to it. Think of it more like electricity or power, and I had to bring Kelly for that insight. I appreciate that. Investors plant more than $1 trillion into US-based exchange-traded funds in 2024, shattering previous records at three years ago, and raising Wall Street hopes for an even bigger year ahead.

That’s like an alarm bell for me. So down 25% might happen. All right, data on deck. Case Shiller Home Price Index is actually pretty important. There are people out there gambling who may want to take their positions off when this news comes out. All right, so happy New Year to everyone. I will see you next year and stay with us in premium for a little bit more detail on the on the CTA retail side, as well as a quick peek at the pictures. But before we do that, let’s look at the chart. All right, I want to.

So let’s go with gold. There’s really look, the markets nowhere, right? So I think the most important takeaway, and I don’t have it up here, but let me pull it up for you to say. Every Sunday, we have a discussion that the founders are invited to, and we go through various topics. Commitment of traders is usually a mainstay, but other topics are involved. And this weekend, the one which has passed, I think this might be the most important chart to look at. If you’re looking at gold right now and you’re trying to figure, should I sit on my hands? Should I do something? We had a very lengthy discussion on that, and that’s in this post.

But the video is made available for everyone. But this chart here, again, I’ve touched on this before, Randall Blala puts this together for us. The gold line is the price of gold and the blue-red combo line. That’s open interest. So here we are. Open interest is pretty much. This is a chart going back to, you know, December. November of 21. Okay. Here’s where open interest generally bottoms in a normal market, meaning in a market that doesn’t have an election going on. Bottom, bottom, bottom. Can I draw lines here? Yeah, I can. Bottom, bottom, bottom, bottom. Right? Right? And now this is our run up.

This is everyone getting in. Now the market is getting back to normal. So in open interest terms, that’s us now. Okay. However, now we’ve moved to the market. The market bottomed here. Market bottomed here. Market bottomed here. Here. Here. These little three, three little bottoms we don’t care about. Right? And now here we are and the market is here. Right? What does that tell you? All the hot money as governed by, all the hot money as governed by the open interest being all the way down here again. Right? Is out. But the price is still up.

And that’s an extremely beautiful thing. So enjoy your family, enjoy the new year, wait for the CTA lemmings to get oversold, and then get long. Or do like me and maybe get a little bit short going into the new year. I don’t have anything on right now other than a butterfly. And then wait for the idiots to sell it even more and then you buy it. Anyway. All right. That’s. That’s what I wanted to show you on the gold market. Oh, look at that. All those pretty pictures are still there. Silver. I want you to expect.

I want you to fully expect silver to have attract more selling if stocks sell off. And then I want you to ask yourself if the price gets to twenty six dollars. I’m not saying it’s going there. Will you buy more? Because if you get an opportunity, if I get an opportunity to do that, I will add physical between twenty six and twenty seven dollars. Why? Because that’s a stretch too low to the two hundred day moving average. OK, number one. Number two, UBS is telling clients that between twenty six and twenty eight, they’re going to recommend that they get long silver.

Now they’re going to get along by selling puts, you know, which is not something I recommend to you unless you like to sling guns. But that’s where I am. So I’m going to find something else to look at. Thankfully, natural gas will keep me busy. Right. So happy new year, everyone. Happy and healthy. Please contact your financial adviser before making any decisions and thanks for watching. [tr:trw].

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