In retrospect, the gold trade was unsure of the primary source of the massive April upside extension of the historic gold rally which began early last October.

While the trade remains vulnerable to additional stop-loss selling today from very large net spec and fund positioning, further extraction of war premium is also expected with the gold futures and options positioning (adjusted into the recent highs) likely at three year highs!

However, Bloomberg overnight carried a story suggesting a large portion of the gold rally was sparked by aggressive buying at the Shanghai futures exchange...[MORE]

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