There is algorithmic selling activity in Gold, notes Daniel Ghali, Senior Commodities Strategist at TDS.
Gold sales activity will be short-lived
“The yellow metal is being dragged down in this round of deleveraging and CTA sell-offs, but our future price simulations suggest that CTAs will return to bid on Gold in any price scenario in the coming sessions, suggesting that this round of sales activity will be short-lived.”
“In addition, macro funds and discretionary traders have replenished their arsenal of dry powder to deploy, with evidence suggesting that macro fund purchases are again on the rise. After all, rates markets are already priced for an aggressive outcome , while the relentless USD rally has not only failed to weigh on precious metals amid Mystery Buying signals, but US10y yields are strengthening noticeably in this aversion trading activity. risk, and geopolitical uncertainty remains high.”
“While macro funds will redeploy their capital into the yellow metal’s warm embrace, CTAs will contribute to further gains, while a reversal in current price action trends would likely be mitigated by ‘Mystery Buying’ associated with the depreciation pressures on Asian currencies.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
