Record high for gold prices
US dollar weakens in the FX market, geopolitical tensions fail to subside between the US and China.
Gold Technical analysis, overview, strategies, and levels
Fresh record highs for gold this morning taking the headlines in the financial markets, as the US dollar weakens further in the FX market. Geopolitical uncertainties have failed to subside, especially between the US and China following consulate closures. Progression on the fiscal stimulus front between US lawmakers on what is expected to be a trillion plus stimulus package has increased expectations of further accommodative policies, and where the Federal Reserve this Wednesday is unlikely to advocate any change in its current string of monetary stimulus programs.
Overall, conformist breakout strategies have been the outperforming ones last week befitting the precious metal’s current volatile technical overview, even as all its key technical indicators flash green.
Its price has broken well above its current bull trend channel and by capturing more headlines, more will be enticed into trading the gold moving forward, which in turn could result in more volatility. Those expecting its price to settle within current ranges can consider contrarian reversal strategies, aware that it’ll be at risk of getting stopped out should volatility fail to subside and ranges break.
IG client* and CoT** sentiment for Gold
As for trader sentiment, retail buy bias rose to 68% mid-week with fresh longs enticed into closing out on the gains, starting this week at 65%. An increase in CoT longs by 4,032 lots has done little to change the extreme long 83% bias held by larger speculators.
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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