Gold prices remain within its bear trend channel
USD strength even as yields retrace of the highs, both retail and CoT traders heavy long the precious metal.
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There was little to go on in terms of impacting economic data, the focus primarily on central bank speak with the European Central Bank’s (ECB) Lagarde and other key central bank leaders speaking at a forum talking about supply chain woes and bottlenecks that she expects to fade in the first half of next year. The Federal Reserve's (Fed's) Chairman Powell spoke about the 'tension' between high inflation and still elevated employment (that has yet to get to pre-pandemic levels), inflation more concerning even if remaining optimistic about next year.
US data showed pending home sales surge 8.1% well above expectations with its previous revised to -2%, mortgage applications according to MBA (Mortgage Bankers Association) dropping 1.1% after last week's 4.9% growth.
We’ve got more central bank speak tonight with the Fed’s Powell, economic data includes unemployment claims and growth domestic product (GDP) while in the background the clock is ticking as we approach the midnight government shutdown deadline. Pricing data for both the US and Eurozone will be on offer tomorrow.
Gold Technical analysis, overview, strategies, and levels
When it comes to gold prices, another consecutive drop even as yields retraced a bit off of the highs, the dollar strengthening in the FX market and taking plenty priced against it into the red, here just shy of both its previous 1st Resistance and Support levels, and in turn only offering a contrarian buy-fade strategy.
The price movement has thus far been within its bear trend channel but lacking follow-through, unlike silver which was hurt far more, platinum and palladium also in the red, the gold/silver ratio jumping into the 80s for a fresh high unseen since November of last year.
| Current Technical Overview | Bear Trend - Stalling |
| Technical Overview Conformist Strategies | Sell 1st Resistance After reversal, Sell 1st Support Upon Breakout From Above |
| S/L for 2nd Resistance | 1758.46 |
| 2nd Resistance | 1752.07 |
| S/L for 1st Resistance | 1745.69 |
| 1st Resistance | 1739.30 |
| Relative Starting Point | 1726.53 |
| 1st Support | 1713.76 |
| S/L for 1st Support | 1707.37 |
| 2nd Support | 1700.99 |
| S/L for 2nd Support | 1694.60 |
IG client* and CoT** sentiment for Gold
In sentiment, retail traders are on hold and unchanged at a heavy buy 76% not far off extreme levels, while silver retail trader bias is at 87% and platinum at an even higher 89%.
CoT (Commitment of Traders) speculators as per last Friday’s report are heavy buy and edging further away from extreme buy territory, silver CoT dropping to moderate long territory, platinum in the middle, and palladium majority short.
Gold chart with retail and institutional sentiment
*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
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