Gold (XAU/USD) – Repeated attempts at new all-time high, US retail sales weigh

Gold (XAU/USD) – Repeated attempts at new all-time high, US retail sales weigh

Gold continues to test and reject its previous all-time high at $2,485/oz. and a larger break is offset by a strong US retail sales report

• Gold cannot break higher as resistance holds firm.
• Weekly net short positions increase.

Gold is under pressure after the release of a stronger-than-expected US retail sales report. Expectations of a cut of 50 basis points were reduced – from 38% to 25% – while expectations of a cut of less than 25 basis points were increased from 62% to 75%.

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Gold continues to test the all-time high since mid-July at $2,484/oz. and it is likely to do so again, but a little further. The daily chart remains technically bullish – higher near-term lows and simple supporting moving averages – with initial support outside the 20-dsma at $2,417/oz. followed by $2,400/oz. A break below $2,380/oz. would negate the optimistic short-term outlook.

Daily gold price chart

Chart via TradingView

Retail trader data shows that 50.72% of traders are net-long, with the ratio of long-short traders at 1.03 to 1. The number of net-long traders is 8.89% higher than yesterday and 13, 18% lower than last week, while the number of net-short traders is 9.63% lower than yesterday and 34.51% higher than last week.

We typically take a contrary view to crowd sentiment, and the fact that traders are net-long suggests that gold prices could continue to fall. Positioning is more net than yesterday, but less net-long than last week. The combination of current sentiment and recent changes gives us a mixed trend for gold trading.

What is your point of view? Gold – bear or bear?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1.