Traders Short Gold for First Time Since January - Bottom in Place
Gold–A substantial shift in retail forex trading positioning leaves our proprietary Speculative Sentiment Index indicator short Gold versus the US Dollar (ticker: USDOLLAR) for the first time since January. We see distinct risk of further Gold price gains.
Trade Implications – Gold: Two weeks ago we wrote that it was not a time to catch falling knives as our retail positioning-based SSI warned of further gold price weakness. Yet retail sentiment has seen a substantial swing; long interest has fallen a remarkable 48 percent from its recent peaks while short interest has surged 159 percent through the same stretch.
The impressive swing in positioning warns that gold prices likely set a short-term bottom, but our Senior Technical Strategist believes this may be a good opportunity to sell Gold strength.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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