Gold Talking Points
Broader outlook for gold prices[1] remain tilt to the downside as the precious metal extends the bearish trend from earlier this year, and the recent rebound appears to stalling at a near-term pivot as the precious metal quickly falls back from the July-high ($1266).
Gold Price Outlook Mired by Extreme Retail Positioning
A look at the monthly opening range suggests a near-term top is in place amid the failed attempts to close above the $1260 (23.6% expansion) hurdle, and gold prices may continue to consolidate over the days ahead as trader sentiment sits at an extreme.
The IG Client Sentiment Report[2] shows 88.2% of traders are still net-long gold, with the ratio of traders long to short at 7.45 to 1. The number of traders net-long is 3.4% lower than yesterday and 2.4% higher from last week, while the number of traders net-short is 5.2% lower than yesterday and 6.8% lower from last week.
The update reinforces a bearish outlook for gold as retail interest remains heavily skewed, with recent price action curbing the threat for a larger recovery as both price and the Relative Strength Index (RSI) preserve the bearish formations from earlier this year.
Gold Daily Chart
- Gold prices may face range-bound conditions following the failed attempts to close above the $1260 (23.6% expansion) hurdle, with the lower bounds coming in around $1246 (23.6% expansion) to $1249 (38.2% retracement).
- However, a break/close below the stated region brings the downside targets back on the radar, with gold at risk of staging a more meaningful run at the December-low ($1236).
- Next area of interest comes in around $1210 (50%
