Gold Price Movement and Retail Trader Sentiment

3 авг. 2023 г.

In the last 48 hours, gold prices have experienced a decline of nearly -1.7 percent. This downward movement coincides with a surge in longer-term US Treasury yields, particularly noticeable in the 10- and 30-year bonds. XAU/USD, often functioning as an anti-fiat instrument, has exhibited an inverse correlation to a blend of the US Dollar and Treasury yields.

Presently, retail traders appear to be rekindling their inclination towards augmenting their net-long positions in gold. This trend is evident when observing the IG Client Sentiment (IGCS), which typically operates as a contrarian indicator. Given this context, could this trend be interpreted as an indicator of gold's potential to extend its decline?

Assessing the sentiment around gold, the IGCS gauge reveals that approximately 76% of retail traders maintain a net-long stance on gold. As the majority leans towards a bullish bias, it suggests the likelihood of prices continuing to decrease in the future. This is further substantiated by a 2.96% and 23.76% surge in upside exposure compared to the previous day and the prior week, respectively. Consequently, the combination of existing positioning and recent alterations in exposure points to a more robust bearish contrarian trading inclination.

XAUUSD BUY 1931- 1933🕯

✅ TP1: 1939
✅ TP2: 1942
✅ TP2: 1947

❌ SL: 1925