Gold Selling Off - Watch out Below if we Clear $1529
Gold–Retail forex traders are very enthusiastically buying into Gold weakness against the US Dollar (ticker: USDOLLAR), and a contrarian view of crowd sentiment warns against buying into the sell-off.
Trade Implications – Gold: Retail traders are now their most net-long Gold since the pair bottomed in May of last year, and such one-sided sentiment warns against joining the crowd. Our proprietary data shows that these positioning extremes can often occur at the major market bottom (or top), but the reversal is only clear in hindsight. Our technical forecast warns that a break below $1529 in gold could force a much larger sell-off.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
New to FX markets? Learn more in our video trading guide.
Contact David via
Twitter at http://www.twitter.com/DRodriguezFX
Facebook at http://www.Facebook.com/DRodriguezFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.