Gold

It was a textbook reaction in gold in response to the stronger jobs and consumer sentiment data, with the metal falling, dollar and yields rising. It fell from around $2020 to a low so far of $2002. While down, it is certainly not out. It was only on Monday when it hit a new record high, albeit a short-lived one. Still, the downside could well be limited, especially if we see more evidence of waning inflationary pressures around the world.

After reversing from record highs, could Gold be vulnerable to a deeper pullback?

The commitment of traders (COT) report shows how large speculators are positioned across futures markets on the CME exchange.

Gold took full advantage of lower yields on Friday to accelerate into its record high, leaving the question as to whether it can break above this key milestone or present us with a desirable pullback first. The ASX 200 is also considering a break above its 200-day MA.

Gold just posted its highest monthly close on record, and now trades less than $40 from its record high set in May. With seasonality on its side, I suspect another crack at the record high could be in order. Although it does run the risk of a shakeout around the milestone level.

The US PCE inflation report is arguably the event of the week, and with traders having vigorously sold the US dollar ahead of it I am left wondering if it is a case of ‘sell the rumour, buy the fact’ – especially if it comes on hot. And with AUD/USD and gold stalling around key levels on Wednesday, the potential for mean reversion seems apparent.

Gold is knocking on the door of record highs heading into what has recently been an extremely strong period for bullion prices. But having rallied so hard since early October, it comes across as being priced for perfection near-term.

Gold was up nearly 1.3% by late afternoon trading in London, near $2040 while silver was closing in on the $25.00 level. The precious metals have been supported by two factors: Bond yields and US dollar, both falling.

Today we look at a cheeky long setup on gold with its double bottom pattern at support, and an interesting setup on EUR/CHF which could appeal to bearish swing traders.

It seems the dollar correction is finally underway, with the US dollar index suffering its worst single day in one year. And it shows the potential for further losses, even if it has found support for now. Gold also shows the potential to have another crack at $2000.

US inflation turned out to be weaker than expected on both the headline and core fronts, and the market’s response was a swift one. We saw gold and silver rise, as yields and the dollar dropped, while index futures jumped with the pace of the rally gaining further momentum once the cash markets opened on Wall Street.

Large speculators increased their gross-long exposure to AUD/USD futures by 17.1% and trimmed shorts by -2.9% on the day of the RBA’s last hike. And this could be a significant development when you consider net-short exposure recently hit a record level of bearishness just six weeks ago, yet prices defied bears with a sustainable break beneath 63c.

US benchmark bond yields look like they may have bottomed in the near-term, an outcome that may generate additional headwinds for gold at time when it’s already struggling.

Markets have been very quiet in the last couple of days, with the lack of any major data causing stocks to drift higher, extending their recent trend, while the dollar has drifted back higher following last week’s data-driven sell-off. As a result, gold and silver have weakened so far this week. But are we now going to see a recovery?

AUD/USD and gold have struggled in November, giving back some of the gains achieved in late October. With both sitting near key levels, we look at the prospects for a bounce or extension of the pullback in the days ahead.

Precious metals prices have weakened over the last couple of weeks, following gold’s impressive +7% gains in October, and silver’s not-so-impressive 3% rise. Last month’s gains for gold were mostly driven by safe-haven demand as the flare up in the Middle East conflict saw investors rush out of risk-sensitive assets.

Gold enjoyed its best month in seven in October, with its 7.3% rise forming a clear bullish engulfing candle and was its third best month of the year. Whether it can extend its rally and make a run for a new record high remains to be seen, but we have seen gold failed around the $2075 highs three times since 2020. What would be so different this time?