Weekly Precious Metals Report: Gold Needs Strong Trigger To Push Higher
Andy Farida | Jul 24, 2017 08:13
Gold
Overall Sentiment
- Build-up in speculative gross short position could fuel a short-covering rally
- Gold is rebounding but it will need a strong trigger to advance higher
Speculative funds positioning
- There was little activity between longs and shorts – both were reducing their exposure but very mildly
Bullish perspective
- Fed unlikely to do any immediate rate hike in the very shortterm amid various domestic political uncertainties
Bearish perspective
- Recent rebound seems to have sufficient momentum higher, but a technical rejection from a dollar recovery could send it lower again
Conclusion
Renewed buying interest is likely from short-covering activity
Silver
Overall Sentiment
- Silver has rebounded well and the strong recovery is likely to give short-sellers food for thought
- No way of ruling out a short period of consolidation before it turned higher again
Speculative funds positioning
- No change in the current trend as fresh selling increased their bearish exposure despite the recent rebound
- Lack of fresh buying in the market
Bullish perspective
- Short-term technical indicators have turned bullish but not sure if it is sustainable
Bearish perspective
- Based on its daily chart, silver is still trading within a downward channel
- Still trades below the 20 WMA and that suggest that sellers still have that the upper hand
Conclusion
We expect some short-term consolidation first to test technical support before it can attempt higher again
Market moving events this week
- Donald Trump Jr and Paul Manafort will go before Senate Committees on Wednesday
- Jared Kushner, son-in-law of Trump, will be interviewed by the Senate Intelligence Committee today
- US Dollar Index remained under selling pressure – broke into fresh 2017 low
- Sean Spicer resigned, but US equity market seem to ignore the news for now
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