Market Analytics and Technical Considerations
- The recent upward movement of gold stops.
- Weekly short positions for retail traders decrease.
Because of the significant events and data releases planned over the following three days, the second part of this week is expected to see an increase in market turbulence. Jerome Powell, the chairman of the Federal Reserve, will speak at the Brookings Institute later on today. Market players will closely examine his remarks for any indications of the Fed’s future monetary policy. The most recent analysis of core PCE, the Fed’s preferred inflation indicator, will be released on Thursday, and at 13:30 GMT on Friday, the US Jobs Report (NFPs) will be released. The remainder of the week will be busy and possibly unstable.
Short-dated US Treasury yields have increased prior of Jerome Powell’s address after lately sliding lower. While the yield on the 2-year UST is only 2 basis points higher at 4.48%, it is 4 basis points higher on the 1-year UST at 4.82%. The daily yield chart is forming a head and shoulders formation, which is signaling a change in the technical prognosis for the 2-year UST. The neckline at 4.27% may be broken, but yields may hold steady in this area.
Gold continues to track US bond yields and dollar movements, so precious metal traders must pay attention to Powell’s speech at 18:30 GMT. Technically speaking, we recently observed that a bullish flag was forming, but this did not fully manifest.
The price of gold is consolidating; is a bullish flag forming?
On the daily gold graph, the first amount of support is at $1,740/oz, followed by $1,726/oz, and any pre-Powell movement should be halted at Monday’s peak of $1,763.8/oz.
According to data from retail traders, 77.81% of traders are net long, with a long-to-short ratio of 3.13 to 1. The number of investors who are net-long is down 2.60% from Tuesday and higher 3.88% from the previous week, while the amount of traders who are net-short is up 4.69% from Tuesday and dropped 33.62% from the previous week.
The fact that traders are net-long signals that gold prices may continue to slide. We normally take a contrarian stance against the attitude of the public. Fewer net-long than Tuesday, but much more net-long than last week, is the posture. We have a further mixed gold trading bias as a result of the present mood and previous adjustments.