News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Gold, Silver Price Forecast: XAU/USD, XAG/USD May Rise as Retail Traders Sell

Gold, Silver Price Forecast: XAU/USD, XAG/USD May Rise as Retail Traders Sell

Daniel Dubrovsky, Strategist

Gold, Silver, XAU/USD, XAG/USD, Technical Analysis, Retail Trader Positioning - Talking Points

  • Retail traders are turning more bearish gold and silver
  • This could hint at further gains for the precious metals
  • Check out the webinar for a dive into the fundamentals

Gold and Silver prices have been on the rise as of late, tracking a decline in the US Dollar and Treasury yields. Now, retail traders are increasingly betting that XAU/USD and XAG/USD could reverse lower. This can be seen by looking at IG Client Sentiment (IGCS), which tends to behave as a contrarian indicator. With that in mind, could an increasingly bearish shift in retail traders hint at more gains to come for the precious metals? For a deeper dive into the fundamentals, check out the webinar recording above!

Gold Sentiment Outlook - Bullish

The IGCS gauge shows that about 84% of retail traders are net-long gold. Since most traders are still biased to the upside, this suggests that prices may continue falling. However, downside exposure has increased by 3.03% and 16.08% compared to yesterday and last week respectively. With that in mind, recent shifts in positioning are hinting that the price trend may soon reverse higher.

Gold, Silver Price Forecast: XAU/USD, XAG/USD May Rise as Retail Traders Sell

XAU/USD Technical Analysis

On the daily chart, gold has confirmed a breakout above the near-term falling trendline from late April. That has opened the door to reversing the downtrend since then. Recently, prices have also taken out the 20-day Simple Moving Average (SMA), exposing the 50-day line. On balance, this could hint at further gains. Otherwise, a turn lower would place the focus on the 1787 – 1810 support zone.

Gold, Silver Price Forecast: XAU/USD, XAG/USD May Rise as Retail Traders Sell

Chart Created in Trading View

Silver Sentiment Outlook - Bullish

The IGCS gauge shows that about 95% of retail traders are net-long Silver. Since the majority of them are still heavily biased to the upside, this suggests that prices may continue falling. However, downside exposure has climbed by 9.57% and 6.78% versus yesterday and last week respectively. With that in mind, recent changes in positioning are hinting that Silver may soon reverse higher.

Gold, Silver Price Forecast: XAU/USD, XAG/USD May Rise as Retail Traders Sell

XAG/USD Technical Analysis

Silver prices confirmed a breakout above the falling trendline from the middle of April, opening the door to extending gains. Still, prices have been unable to break above the former 21.42 – 22.26 support zone, which could hold as new resistance. A breakout higher exposes the 50-day SMA, which could reinstate the downside focus. Such an outcome would place the focus back on the May 13th low at 20.462.

Gold, Silver Price Forecast: XAU/USD, XAG/USD May Rise as Retail Traders Sell

Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from May 24th Report

--- Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES