Gold Price Outlook: XAU/USD Rebounds From A 6-Week Low. Now What?

Gold Price vs. GLD ETF Shares Outstanding – 12 Months

Gold Price Outlook: XAU/USD Rebounds from a 6-Week Low. Now What?

Source: Bloomberg, DailyFX

Technically, gold prices remain in a bearish setup after breaking below the “Ascending Channel” in early January (chart below). Prices have likely found some near-term support at around US$ 1,807 – where the lower Bollinger Band and a previous support level intercept. The MACD indicator is trending lower, suggesting that bearish momentum might be prevailing in the near term. Breaking below the US$ 1,807 support may open the door for further losses with an eye on US$ 1,770 – the previous low.

Gold Price – Daily Chart

(Click on image to enlarge)

IG Client Sentiment indicates that retail gold traders are leaning heavily towards the long side, with 85% of positions net long, while 15% are net short. Traders have increased short positions (+10%) while reducing long exposure (-6%) overnight. Compared to a week ago, traders have increased both short (+14%) and long (+7%) bets.

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