© Dukascopy Bank SA
"We are looking more at the 2016 panorama, in which the Fed continues to tighten and the U.S. economy delivers reasonably well. That does not argue for a higher gold price. Gold will be a casualty."
- Societe Generale (based on Bloomberg)
Pair's Outlook
The bearish scenario was fully implemented on Monday, as gold prices came under a substantial pressure created by short traders. After crossing both weekly S1 and lower Bollinger band around 1,062 the bullion settled at 1,060 by day-end. A recovery is not being ruled out on Tuesday, but the overall outlook has deteriorated since yesterday. The bears are now setting eye on a more medium-term target, namely the 2010 low at 1,044. However, markets remain cautious ahead of the Fed decision, which may surprise on the dovish side and eventually send gold upwards.
Traders' Sentiment
SWFX traders decided to increase the total number of short market positions. At the moment the bears are accounting for 41% of the whole market, while the bulls are down to 59% (62% yesterday). This is the most bearish-biased distribution in five weeks.
© Dukascopy Bank SA