© Dukascopy Bank SA
"As it is a holiday shortened week, I don't think we would see much action. Having said that, we could see some sharp moves because of the paltry liquidity in markets."
- a precious metals trader in Hong Kong (based on CNBC)
Pair's Outlook
In the run up to Christmas holidays gold recovered past 20-day SMA to close at 1,075. As the volume of trading kept declining, volatility of price changes was quite insignificant. Given that there are no major statistical events throughout a new week, we foresee the bullion to develop in a horizontal trend by using the weekly pivot point and 20-day SMA (1,072/73) as key anchors. For the bulls, an extra supply is offered by the Nov-Dec downtrend at 1,077. Therefore, longer-term perspectives for January are still skewed to the downside.
Traders' Sentiment
The total number of bullish open positions has been steady since Wednesday of last week. Advantage of short market participants is 10% at the moment, as they are keeping 55% of all trades versus 45% for the bulls.
© Dukascopy Bank SA