Gold’s uptrend signals are weakening, according to the analyst

As gold continues to approach all-time highs, the price action actually weakens the strength of uptrend signals and therefore lowers the bar for CTA trend followers to liquidate their duration, notes Senior Commodity Strategist Daniel Ghali TDS.

Price action weakens the strength of uptrend signals

“A break below the $2,490/oz range may now catalyze selling activity that could ultimately lead to liquidations totaling -25% of current long algos positions. In today’s extreme positioning environment, the first to blink could snowball further liquidations from other cohorts.”

“We reiterate that our measurement of macro fund positioning is at the highest levels since the Brexit referendum in 2016, the ‘stealth QE’ narrative in 2019 and the depth of the pandemic in March 2020. Electoral risks are a potential catalyst, the increasing chances that Trump’s presidency now be tied to a stronger USD and lower gold prices.”