According to IG data, 54.01% of clients holding positions in gold are net-long, with a buyer-to-seller ratio of 1.17 to 1. The number of net-long traders has increased by 8.22% since yesterday and 1.60% from last week, while those with short positions have decreased by 3.65% from the previous session but increased by 2.22% from a week ago.

Typically, we take a contrarian view to crowd sentiment, meaning the current bullish sentiment among retail traders might indicate a potential pullback in gold prices. However, our confidence in this outcome is tempered by the fact that retail positioning is more net-long than yesterday but less so than a week ago, suggesting a mixed outlook.

Key Takeaway: Contrarian indicators offer useful insights into market psychology, but they are most effective when used alongside technical and fundamental analysis. For those considering trades in gold, a comprehensive approach is essential to navigate this period of mixed signals.

GOLD PRICE – MARKET SENTIMENT

May 17 2024

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