This is not the same gold market as it was just a few months ago, notes Daniel Ghali, senior commodity strategist at TDS.
The scope for further gains is limited
“Discretionary traders continue to hold a larger position than justified by the market’s outlook for Fed rate cuts, which are somewhat elevated. CTAs now effectively have a ‘max long’ position size, suggesting little room to add without a re-leveraging process.”
“While we expect central bank buying activity to persist, Asia remains in a buyers’ strike with only nascent signs of a bid in recent sessions. After all, price action in Asian currencies has dampened appetite for precious metals as a hedge against currency depreciation.”
“A safe-haven bid associated with Middle East geopolitical risks may be supporting prices, but scope for further gains is limited by positioning dynamics at the moment without a more significant escalation or prospect of deeper cuts from the Federal Reserve.”
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.
