Gold Talking Points
The recent rebound in the price of gold[1] continues to unravel, with bullion at risk for a further losses as it carves a fresh series of lower highs & lows.
Gold Prices Carve Fresh Bearish Sequence After Posting July-High
The precious metal continue to fall back from the monthly-high ($1266) after stalling at a near-term pivot, with the July-low ($1238) now on the radar as the bearish momentum appears to be gathering pace.
Keep in mind , the monthly opening range suggests a near-term top is in place following the string of failed attempts to close above the $1260 (23.6% expansion) hurdle, and the recent rise in volatility appears to be accompanied by a pickup in long interest as retail sentiment continues to sit at an extreme.
The IG Client Sentiment Report[2] shows 88.0% of traders are still net-long gold with the ratio of traders long to short at 7.35 to 1. The number of traders net-long is 0.2% higher than yesterday and 5.3% higher from last week, while the number of traders net-short is 13.5% higher than yesterday and 7.6% lower from last week.
The update continues to reinforce a bearish outlook for gold as retail sentiment remains heavily skewed, and the precious metal may stage a more meaningful run at the December-low ($1236) as the Relative Strength Index (RSI) flirts with oversold territory, with a break below 30 likely to be accompanied by a further decline in the price of gold.
Gold Daily Chart
- Broader outlook for gold remains tilted to the downside as both price and the Relative Strength Index (RSI) extend the bearish formations from earlier this
