Gold (XAU/USD) - Latest Sentiment Analysis
- US rate cut fully priced in on September 18.
- Gold ’s multi-month range now in danger.
The price of gold continues to push higher and is set to test the May 20th all-time high of $2,450/oz. Renewed speculation that the Federal Reserve will cut rates by 25 basis points in mid-September is helping the latest move higher. Financial markets are now pricing in a total of 65 basis points of US rate cuts this year, leaving a third move lower a 50/50 call.
The daily chart shows gold nearing the top of its recent multi-month range with the move supported by the 20- and 50-day simple moving averages. The CCI indicator suggests that gold is overbought, so a short period of consolidation may be seen before fresh highs are made.
Gold Daily Price Chart
Retail trader data shows 49.86% of traders are net-long with the ratio of traders short to long at 1.01 to 1.The number of traders net-long is 1.69% lower than yesterday and 12.94% lower from last week, while the number of traders net-short is 5.27% higher than yesterday and 16.85% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Gold prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Gold-bullish contrarian trading bias.