Gold sentiment has begun to climb over the past week

The gold price declined Tuesday morning as global financial markets shifted from “risk on” to “risk off.” The price of gold fell $21.80 to $1,722 per ounce, sinking alongside both stocks and commodities. S&P 500 stock futures fell 15.70 to 1265.20 while oil and copper fell 1.5% and 3.2%, respectively. Gold’s sister precious metal fell 2.8% to $34.30 per ounce as measured by front month silver futures on the COMEX.

Gold sentiment has begun to climb over the past week from a “very bearish extreme,” according to Macquarie Equities Research analyst Stephen Harris.

In a note to clients on Monday, Harris higlighted the Ned Davis Research (NDR) Daily Gold Sentiment Composite, which fell to 7.1 on October 14 – its lowest level since at least January 1, 2006 (he did not provide data going back further).

Since that time, the NDR Daily Gold Sentiment Composite has rebounded modestly – to approximately 12 – but remains well in the “pessimistic” zone.

From a contrarian and historical perspective, these readings are “very bullish” for gold prices, according to Harris.

“Near term there is a strong buying opportunity as sentiment towards bullion has reached a bearish extreme, but is starting to rebound,” he added. ”We view this recent price action as being very bullish. Sentiment has retrenched considerably with only a minor consolidation in price. In our view, the pullback from the spike above $1900 to the long trendline has been healthy and prices have begun to strengthen as we move into the seasonal strong year-end period.”

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

Gold Price Futures (GC) Technical Analysis – Trader Reaction to Minor 50% Level at $1954.80 Sets the Tone

Image
  Gold futures closed lower on Thursday but up from its low of the session as investors battled a number of factors including U.S. economic data and outside market influences. Earlier in the session, gold fell over 1%, as positive economic data elevated hopes for a quick recovery while dampening the investment appeal of the precious metal. On Thursday, December Comex gold futures settled at $1937.40, down $11.60 or -0.60%. On the data front, a drop in U.S. jobless claims reported Thursday and positive manufacturing data reported earlier in the week are taking some shine off gold. A weaker Euro is also weighing on dollar-denominated gold by driving up thU.S. Dollar Index. U.S. weekly jobless claims fell below 1 million last week for the second time since the pandemic started, but did not signal a strong recovery in the labor market because the drop largely reflected a change in the methodology used to address seasonal fluctuations in data. Earlier in the week, a report s
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more