28691
What Next for Gold After the Break?
World Economy

What Next for Gold After the Break?

The combination of a wobbly dollar, fading rate hike expectations and an improved technical outlook all helped drive gold to a four-month high last week. The positive short-term technical outlook, however, is now blighted by a big rise in bullish bets, which leaves the metal vulnerable to a pullback, Business Intelligence Middle East reported.
The technical break above the August high, which was highlighted as a key level, helped drive gold to $1,192/oz last week. That is the highest level since June 22 and it has further helped change sentiment in the market, with the rally no longer only driven by short covering.
Back in July, hedge funds held record short bets of 121,000 lots of futures and options (12.1 million ounces) as the market was toying with key support at $1,080/oz. Since then short covering has seen the gross short more than halved, and only during the past couple of weeks has the rally been given an extra push from new buyers.
In the short term, the rapid rise has left the metal vulnerable to a retracement. Using Fibonacci the first two major retracement levels can be found at $1,158 and $1,148/oz. Further down it will take a break below $1,138/oz before bears come out of hibernation.
 Investors using exchange-traded products added 8.3 tons last week, with the total addition during the past four weeks reaching 20 tons. The total holding, according to Bloomberg, now stands at 1,537 tons, which is more than 50 tons below the levels seen in June when gold last traded at current levels.
This highlights the lack of enthusiasm among longer-term investors, with short-term tactical traders, such as hedge funds, currently doing most of the buying.

 

Short URL : https://goo.gl/XFbhuV
  1. https://goo.gl/Sb8eYO
  • https://goo.gl/Pt9tsq

You can also read ...

South Korea Economy Facing Downside Risks
The South Korean economy will face some downside risks going...
Marlo Draghi (L) and Janet Yellen at the Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming on January 7.
Stock markets have spent the year rising on bets of a...
The authorities—the government, the central bank, supported by the state-owned banks—are now pulling all levers  to keep this mounting debt under control.
Corporate debt in China has soared to $18 trillion, or 169% of...
Diesel Emissions Scandal a Risk to German Economy
The emissions scandal ensnaring German carmakers is a risk to...
Deals outside Turkey are much cheaper and better  than Turkish opportunities.
Robert Yuksel Yildirim had barely been at the family’s...
The London Metal Exchange
World stocks struggled at a 5-1/2-week low on Monday, though...
Madura Says Will Tackle Inflation
The Venezuelan government’s toughest challenge is fighting...
Thai Q2 GDP Surprises With 3.7% Rise
Thailand’s economy continued its recovery in the second...

Trending

Googleplus