Gold, Silver, Retail Trader Positioning, Technical Analysis – IGCS Commodities Update
- Gold and silver prices have been rising following SVB’s collapse
- Retail traders responded by boosting their downside exposure
- Is this a sign that more upside could be in store for XAU & XAG?
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![Gold Forecast](https://a.c-dn.net/b/1R2bOu/500x707Forecast-Gold.png)
![Gold Forecast](https://a.c-dn.net/b/1R2bOu/500x707Forecast-Gold.png)
In the wake of last week’s collapse of Silicon Valley Bank, gold and silver prices have soared as Treasury yields declined. Retail traders have responded by increasing downside bets in XAU/USD and XAG/USD. This can be seen by looking at IG Client Sentiment (IGCS). IGCS tends to function as a contrarian indicator. With that in mind, if retail traders continue boosting bearish bets, could gold and silver see further upside?
Gold Sentiment Outlook - Bullish
The IGCS gauge shows that about 60% of retail traders are net-long gold. Since most of them are net-long, this hints prices may continue falling. But, downside exposure has increased by 7.85% and 92% compared to yesterday and last week, respectively. With that in mind, recent shifts in positioning hint that the price trend may soon reverse higher.
![Gold Sentiment Outlook - Bullish](https://a.c-dn.net/b/0tGhed/image1.png)
XAU/USD Daily Chart
On the daily chart, gold confirmed a breakout above the 50-day Simple Moving Average (SMA) as well as the 20-day equivalent. This is offering an increasingly neutral setting. There is now the potential for a bullish Golden Cross to form in the days ahead. Immediate resistance seems to be the minor 14.6% Fibonacci retracement level at 1909. Confirming a breakout above that price exposes the February peak at 1959.74. Pushing under 1804 could reinstate a more bearish bias.
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![How to Trade Gold](https://a.c-dn.net/b/2pg7cl/500x707HowtoTrade-Gold.png)
![How to Trade Gold](https://a.c-dn.net/b/2pg7cl/500x707HowtoTrade-Gold.png)
![XAU/USD Daily Chart](https://a.c-dn.net/b/344yhv/image2.png)
Silver Sentiment Outlook - Bullish
The IGCS gauge reveals that about 88% of retail traders are net-long silver. Since most of them are still biased higher, this hints prices may continue falling. But, downside exposure has increased by 2.71% and 62.14% compared to yesterday and last week, respectively. With that in mind, recent shifts in exposure hint that the price trend may soon reverse higher.
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![How to Use IG Client Sentiment in Your Trading](https://a.c-dn.net/b/2O1rDk/500x707Advanced-Sentiment.png)
![How to Use IG Client Sentiment in Your Trading](https://a.c-dn.net/b/2O1rDk/500x707Advanced-Sentiment.png)
![Silver Sentiment Outlook - Bullish](https://a.c-dn.net/b/1ayGPO/image3.png)
XAG/USD Daily Chart
Unlike gold, silver prices have only confirmed a breakout above the 20-day SMA, with the 50-day line still standing above. As well as that line, another key point of immediate resistance is the 38.2% Fibonacci retracement level at 21.92. Confirming a breakout above these 2 points could offer an increasingly near-term bullish trajectory, placing the focus on January peaks. Otherwise, downtrend resumption entails pushing under the early March low.
![image4.png](https://a.c-dn.net/b/2DdnZP/image4.png)
-- Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com
To contact Daniel, follow him on Twitter:@ddubrovskyFX