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"The gold environment is now substantially different from what was apparent several weeks ago when a weaker dollar and a benign rate environment were providing an element of support."
- INTL FCStone (based on CNBC)
Pair's Outlook
Gold prices continued to diminish on Thursday, as the weekly S1 at 1,257.01 was successfully confirmed. However, when the bullion reached the 55-day SMA and attempted to breach this line, it was immediately rejected and sent back to the upside. The session closed with a decent bullish comeback. Nevertheless, the short-term outlook is negative, while a drop below the mentioned moving average will only strengthen the bearish case and will reset eye on the 100-day SMA/March low at 1,209/07. However, fresh weekly technical signals suggest gold is oversold and the purchases should resume.
Traders' Sentiment
Even though the number of bullish SWFX market positions amounts to just 34%, anecdotal evidence shows this is the highest share of the longs in more than two weeks. From yesterday their portion increased by two percentage points.
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