Gold closed on Friday at a new record of $2,178, after briefly surpassing $2,200. According to TD Securities economists, the margin for additional profits will increasingly depend on macroeconomic trends.
Gold prices may continue to rise, but further gains will increasingly depend on macroeconomic tailwinds
The risk-reward ratio in the Gold markets has deteriorated following the strong rally.
Macro traders remain poorly positioned for a Fed cutting cycle, but the surprising dislocation in their positioning relative to market pricing of rates has largely dissipated as markets expect fewer cuts and Discretionary traders have been forced to cover a large portion of their net short positions.
The extreme buying activity of Shanghai traders also appears to be losing steam.
Gold prices may continue to rise, but further gains will now depend more on macroeconomic tailwinds, reducing risk returns from current levels.
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.
