An interesting move in gold this morning with the precious metal on the cusp of testing short-term support. The precious metal fell on Monday after the release of weaker-than-expected U.S. CB consumer confidence data and there is little fresh news so far today to stem or fuel the next move. In the US Treasury market, yields are marginally lower – normally a gold supportive scenario – with the benchmark UST 10-year trading with a yield of 3.14%, down from 3.24% on Monday. US Treasury yields will continue to steer gold and with that in mind, US Fed chair Jerome Powell takes part in a panel discussion at the ECB Forum later today, alongside ECB President Christine Lagarde, BoE governor Andrew Bailey, and the Bank for International Settlements general manager Agustin Carstens. Any further clarity from the Fed chair may give gold a fresh stimulus.

Looking at the daily chart, gold remains biased to the downside. The short-term series of lower highs remain in place, while a near-complete series of lower lows add weight to lower prices. The precious metal remains below all three simple moving averages, while the 50-/200-day sma cross over – ‘death cross’ – adds to the chart’s gloomy outlook. The first level of support is seen at $1,805/oz. before $1,786/oz. comes into play.

Gold Daily Price Chart

(Click on image to enlarge)

Retail trader data show 85.76% of traders are net-long with the ratio of traders long to short at 6.02 to 1. The number of traders net-long is 1.11% higher than yesterday and 11.70% higher from last week, while the number of traders net-short is 2.88% higher than yesterday and 17.54% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias.

What are your views on Gold – bullish or bearish?