Daily Market Report: Precious Metals

Gold: Retail bias rises as fresh entrants fear missing out

Gold continues to march ever higher, with its bull trend accelerating and enticing fresh entrants into the market, and taking retail bias slightly higher to a now majority long 61%.

Range-trading is clearly less ideal in these scenarios, and hence many will likely be shifting to trend trading. And with gold a classic buy amongst small and large traders alike, stop hunting may occur both intraday and interday, spooking longs initiated at lower levels into closing out on fear of retracement.

From a fundamental point of view, the current gains have been long overdue, given monetary easing is back on the table as investors are in search of a hedge against inflation, and geopolitical tensions failing to subside. Around half of all European government bonds are now negative yielding.

Silver: Positive technical bias but not a technical overview shift just yet

Although silver managed to finish higher for the day, a brief look at gold’s price chart and this precious metal is clearly the one missing out. The spread between the two continues to rise, and silver has thus far failed to shift to an initializing bull trend technical overview despite a weakening greenback and surge of flows into gold.

Overall, however, little is needed to shift its technical overview at this stage, with a non-trending ADX and most intraday movement limited, consolidatory reversal strategies have been more ideal. Retail bias is still stuck at an extreme long 94% bias as the bulk of those longs were initiated at higher price levels, with institutional bias slowly rising.