XAU/USD may increase if retail traders reduce their positive bet
Updated
The IGCS gauge shows that about 63% of retail traders are net-long gold. Since the majority are still biased to the upside, this hints that prices may continue lower down the road. However, downside exposure has increased by 18.68% and 16.94% compared to yesterday and last week, respectively. With that in mind, recent changes in exposure hint that prices may reverse higher despite overall positioning.
Gold yesterday settled up by 0.5% at 60082 as top central banks switch to a more cautious posture about further moves in their year-long round of global monetary tightening. Data showed annual U.S. inflation rose at its slowest pace in over two years in June, cementing expectations that the Federal Reserve was closer to ending its fastest rate hiking cycle since the 1980s.
Two European Central Bank policymakers raised the prospect of an end to its longest string of rate rises. The U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.2% last month, compared to May's increase of 0.3%. Inflation in the last 12 months rose 4.1%, down sharply from June's 4.6% increase. Annual inflation also came in a tick cooler than expected. Looking at the broader trend, inflation remains stubbornly high, roughly double the Federal Reserve's target of 2%. Chinese physical gold premiums rose to a four-month high on robust demand, while a price retreat fuelled a slight recovery in purchases in India. Premiums in top consumer China rose to $15-$22 an ounce over global prices from $9-$17 last week. Data showed China's June net gold imports via Hong Kong fell to their lowest in five months.
XAUUSD BUY 1957 - 1959
TP1: 1965
TP2: 1970
SL: 1951
Gold yesterday settled up by 0.5% at 60082 as top central banks switch to a more cautious posture about further moves in their year-long round of global monetary tightening. Data showed annual U.S. inflation rose at its slowest pace in over two years in June, cementing expectations that the Federal Reserve was closer to ending its fastest rate hiking cycle since the 1980s.
Two European Central Bank policymakers raised the prospect of an end to its longest string of rate rises. The U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.2% last month, compared to May's increase of 0.3%. Inflation in the last 12 months rose 4.1%, down sharply from June's 4.6% increase. Annual inflation also came in a tick cooler than expected. Looking at the broader trend, inflation remains stubbornly high, roughly double the Federal Reserve's target of 2%. Chinese physical gold premiums rose to a four-month high on robust demand, while a price retreat fuelled a slight recovery in purchases in India. Premiums in top consumer China rose to $15-$22 an ounce over global prices from $9-$17 last week. Data showed China's June net gold imports via Hong Kong fell to their lowest in five months.
XAUUSD BUY 1957 - 1959 TP1: 1965
TP2: 1970
SL: 1951
Note
Gold prices are falling back towards 1955 after rallying sharply to 1972 levels last night. The current trend is still down. This was driven by a stronger US dollar and growing concerns about China's economic development.
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