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Gold Analysis and News:
Gold Rejects 1800 as USD Picks Up Momentum
Gold retreated slightly and has been stagnant at 1800, while a recovery in dollar demand also weighed on the precious metal. However, the 50% Fibonacci retracement level of the post-Covid range is again in the spotlight. This time gold support was maintained in the short term. As the chart below shows, 1760 is a key level for short-term direction, and the fact that gold is holding that level makes the market bullish. However, if we see a break and close below 1760, the immediate focus for the bears will be 1720-25.
Gold Chart: Daily Time Frame
IG Client Sentiment Signals Mixed Outlook
Retail data shows that 77.07% of traders are net long, with a long-to-short ratio of 3.36 to 1. The number of net long positions increased by 0.02% from yesterday and 0.67% from last week, while the number of net shorts decreased by 6.47% from yesterday and increased by 8.10% from last week.
We usually view crowd sentiment as a contrarian, and the fact that traders are net long suggests that gold prices may fall further.
Positions are net more than yesterday, but less net long than last week. The combination of current sentiment and recent changes gives us another mixed bias towards gold trading.
GBP/USD Falling on Higher BoE Rate Expectations is Bad News
GBP/USD traded lower and retested 1.20 after the UK CPI posted its first double-digit rise yesterday, marking a session high for GBP/USD. As I said, the BoE won’t rise by more than 50bps at its next meeting, so the support the pound can get from higher BoE rate expectations is limited at best. Sterling remains low.
Source: Refinitiv
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