Gold–Retail forex traders remain short Gold versus the US Dollar (ticker: USDOLLAR) for the second-consecutive trading week for the first time since it traded near $1800—we could see further gains.
Trade Implications – Gold: Last week we wrote that the majority of retail traders turned short Gold prices for the first time since January, and that was an early warning sign that a short-term bottom was in place. Crowds remain marginally net-short as spot Gold has mostly consolidated, and we continue to believe that Gold could trade higher as crowds sell.
We’ll nonetheless keep sight of the bigger picture. As tempting as it might be to buy in expectations of a minor bounce, long-term studies favor continued Gold price declines.
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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