Gold prices, and to a lesser extent silver, have been focusing on the upside in recent weeks as traders increasingly looked to a less hawkish Federal
Gold prices, and to a lesser extent silver, have been focusing on the upside in recent weeks as traders increasingly looked to a less hawkish Federal Reserve in the medium term.
Now, all eyes this week turn to December’s US CPI report. Recently, softer average hourly earnings and disappointing ISM services data likely helped set a softer expectation for the inflation data.
Looking at IG Client Sentiment (IGCS), retail traders have been responding by increasingly selling gold and silver. IGCS tends to function as a contrarian indicator. As such, if this trend in positioning continues, further gains might be in store for precious metals.
Let us take a closer look.
Gold sentiment outlook – bullish
The IGCS gauge shows that about 60% of retail traders are net-long gold. Since most traders are still biased to the upside, this hints prices may fall. But, downside exposure has increased by 12.59% and 35.74% compared to yesterday and last week, respectively. With that in mind, recent changes in positioning hint that prices may extend recent gains.
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