Dip towards $1,229 as a buying opportunity

The futures market’s positioning in precious metals remains largely unchanged from last week. For gold, investor believe that the market remains well placed to support a higher gold price. COMEX gold has seen the net long non-commercial position decline to 33.2% of OI, down from 34% the previous week. Current levels are below the average level of 36% over the past 12 months, and spec length does not look overextended.

While most of investor continue to favour a move higher in gold, the metal may test lower yet again before a gold price above $1,250 becomes sustainable. It may see selling in the physical market, and resistance remains in place when gold moves above $1,250.

Gold support is at $1,244 and $1,229, resistance at $1,265 and $1,274. We view a dip towards $1,229 as a buying opportunity.

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