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
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