– Higher US interest rate expectations continue to weigh on the precious metal.
– Chart support at $1,301/oz. may be tested in the short-term.
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The latest gold chart highlights the recent price fall through Fibonacci support at $1,316/oz. leaving the 50% retracement level at $1,301/oz. as the next target for the bears. The latest plunge has also taken the price below 20- and 50-day EMA support and it currently sits on the important 100-day EMA line at $1,311/oz. A break and close below this level would bring the $1,301/oz. target firmly into play. A modicum of relief may come from the stochastic/momentum indicator which currently sits in extreme oversold territory.
P.I.G Retail Trader Data show 67.1% of traders are net-long with the ratio of traders long to short at 2.04 to 1. The number of traders net-long is 1.7% lower than yesterday and 12.9% higher from last week, while the number of traders net-short is 18.9% higher than yesterday and 2.7% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Spot Gold trading bias.
— Written by karl knick, Analyst