Gold–Retail forex traders have bought aggressively into Gold price weakness against the US Dollar (ticker: USDOLLAR). We think gold has further room to fall.
Trade Implications – Gold: Last week we highlighted the fact that traders were very marginally short Gold against the USD—a clear break with the virtually non-stop buying seen from 2012 gold peaks near $1800.
The noteworthy shift left us cautiously in favor of short-term strength, but even at the time we highlighted that long-term studies favor continued Gold price declines.
Recent crowd XAUUSD buying only confirms our bearish bias, and indeed it remains attractive to sell short-term bounces.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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