Everything has its limit - iron ore cannot be educated into gold.”
- There is a sense of frustration from both sides of the camp – both bulls and bears unable to establish any grounds
- Upside limitation meant that there is a greater downside risk
Speculative funds positioning
- Longs and shorts reduced their exposure as the price action start to get rather lacklustre – reduction in bearish position helps sustain gold NLFP somewhat high
Bullish perspective
- Gold is still trading within the weekly uptrend line and has just broken out of the multi-month downtrend line
Bearish perspective
- Resilient US equity market and strong surge in Bitcoin prices dampened the need for haven assets it seems
Conclusion
Gold may be attempting to form a solid base here – some sort of accumulation perhaps though short-term downside risks is still there
XAU/USD
“If I have cash and I can't figure a way to put it into real estate or my business, I hold it in gold and silver.”
Overall Sentiment
- Its price action has been limited within the tight range of $16.50 - $17.50 per oz
- The resilient dollar index continue to be a headwind
Speculative funds positioning
- Net shorts are attempting to rebuild their relatively low position and that could mean selling pressure are building up again
Bullish perspective
- Recent rejection is likely to hurt bullish sentiment – with gold also struggling, we expect silver to continue consolidating
Bearish perspective
- Judging by its price action and technical configuration, the metal seem to have one more leg to the downside
Conclusion
Dips should remain well supported at key technical area but there is no ruling out of further short-term price weakness.
XAG/USD
Market moving events this week
- Rather quiet week after we learnt about the new Fed chair
- Chinese exports and imports data this week should shed more lights on general health of its economy
- Barcelona December election could bring fresh uncertainty into Europe
- Further delay on the US tax reform is likely to keep the market unsettled we feel
S&P 500
US DOLLAR INDEX
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