Gold May Rally Further as Crowds Go in Opposite Direction
XAUUSD–Retail forex traders have scaled back their Gold purchases versus the US Dollar (ticker: USDOLLAR), and the short-term shift in positions suggests the Greenback may slide further versus the resurgent precious metal.
Trade Implications – XAUUSD: We’ve continued to cite extremely net-long retail trader positioning on XAUUSD as a key risk to watch for declines, but the recent correction in positioning actually leaves us modestly bullish. Our Senior Technical Strategist first advocated going long Gold on February 28, and the XAUUSD position remains valid as long as price remains above 1575.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.