Last week, natural gas futures surged by approximately 16.6%, closing at $3.670 per MMBtu. This increase was driven by several key factors:

Main Reasons for the Price Increase

1. Positive Summer Weather Forecasts
   Expectations of a hot summer suggest higher demand for natural gas to power air conditioning, which pushed prices higher.

2. Strong U.S. Jobs Report
   A robust U.S. labor market signaled ongoing economic strength, which supported energy prices.

3. Decline in U.S. Natural Gas Production
   U.S. daily gas output dropped to a four-week low of 100.1 billion cubic feet per day, tightening supply.

4. Increased LNG Exports
   New LNG export facilities like Plaquemines LNG and Corpus Christi Stage 3 have come online, increasing U.S. gas export capacity and demand.

5. Cooler Weather Forecasts
   Forecasts for colder weather raised expectations of higher heating demand, adding further upward pressure on prices.

This combination of rising demand and tightening supply led to the significant price rally in natural gas futures over the past week.

Why does the platinum future performs not as good as the gold future? It seems, it has lost its correlation.

The platinum future has often underperformed compared to gold due to several factors:

1. Industrial Demand vs. Safe-Haven Asset

• Gold is a safe-haven asset, rising in uncertain times.

• Platinum depends on industrial demand (e.g., automotive, jewelry), which drops in weak economies.

2. Substitution by Palladium

• Used in catalytic converters, but increasingly replaced by palladium (cheaper, more efficient).

• This reduces platinum’s industrial demand.

3. Supply & Production

• Mined mainly in South Africa & Russia; supply issues can affect prices.

• Gold has a broader mining network and steady central bank demand.

4. Speculative Demand & ETFs

• Gold attracts central banks & ETFs; platinum has lower investor interest.

Conclusion:

Gold thrives in uncertainty and crisis, while platinum relies on industrial use and faces substitution.

Classic COT Report

• Structure:
  • Commercials (hedgers, large corporations)
  • Non-Commercials (large speculators like hedge funds)
  • Non-Reportables (small traders)
• Pros: Good for long-term trends since commercials often trade against the market while large speculators reinforce trends.
• Cons: Uses an older classification, making it less precise for some markets.

Aggregated COT Report

• New classification:
  • More detailed trader categories (e.g., Swap Dealers, Managed Money, Producers)
• Pros: Provides a clearer market structure, especially for financial futures like currencies and stock indices.
• Cons: More complex to analyze and less useful for some commodity markets.

Which One to Use?

• Currencies, stock indices, bonds: Aggregated data is better since it separates institutional traders more precisely.
• Commodities (gold, oil, corn): Classic COT is often more relevant as it focuses on key players like commercials and speculators.
• Long-term trend analysis: Classic COT (commercials as a contrarian signal).
• Short-term trading & sentiment analysis: Aggregated COT (better insight into hedge funds & institutions).

For intraday or swing trading, the Aggregated COT might be more useful. If you focus on macro trends, the Classic COT is likely better.