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"Over the short-term, the precious metal will likely trend sideways, as funds look to close out the year and contemplate heading into next year with a fresh slate."
- INTL FCStone (based on Yahoo Finance)
Pair's Outlook
The bullion decided to respect a downward trend-line, which connects November and December highs and is currently placed at 1,077. XAU/USD also dipped below the weekly pivot point and 20-day SMA, but in the Asian session on Tuesday it seems to be coming back. Without any shocks, we estimate the trading to be light in the run up to New Year holidays. The downtrend should remain an important anchor for gold in the mid-term, meaning our future expectations are still more bearish than bullish.
Traders' Sentiment
After three days of steady distribution between the bulls and bears (55% vs 45%), the SWFX market sentiment resumed diminishing at the beginning of this working week. The shorts gained one additional percentage point and sent the portion of bulls down to 54%.
© Dukascopy Bank SA