Gold Price Analysis and Talking Points:
- Gold Prices Remain in Downtrend, However, Key Support Holds
- Clients Raise Net Long Positioning
See our quarterly gold forecast to learn what will drive prices throughout Q2!
Gold Prices Remain in Downtrend, However, Key Support Holds
Gold prices have managed to hold above the double bottom at $1266, however, as the US Dollar marches towards its YTD peak, the precious metal may well see a return towards $1266. However, while it is unclear that the precious metal will break below, if indeed this was to take place, eyes would be on the 50% Fib level at $1262, before the psychological $1250 handle. Although, having managed to consolidate above the 2019 low for the time being, we don’t rule out a retest of resistance stemming from the descending trendline at $1282 given that risk sentiment remains fragile, thus underpinning the safe-haven asset.
IG Client Positioning | Clients Increased Net Long Positioning
Ttrader data shows 80.6% of traders are net-long with the ratio of traders long to short at 4.15 to 1. The number of traders net-long is 5.8% higher than yesterday and 10.0% higher from last week, while the number of traders net-short is 9.3% lower than yesterday and 27.7% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.
GOLD PRICE CHART: Daily Time-Frame (Mar 2018-May 2019)
What You Need to Know About the Gold Market
GOLD TRADING RESOURCES:
- See our quarterly gold forecast to learn what will drive prices through mid-year!
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
