Gold is trading like bitcoin now, but a comprehensive flow-based approach does not support the latest leg of this recovery, notes Daniel Ghali, Senior Commodities Strategist at TDS.
Bearish Momentum Likely to Accelerate Below $2,580
“The momentum break experienced on Election Day typically marks the end of such moves. But if that’s the case, what can we expect from here? The rally has created a notable margin of safety for the funds’ positions.” macro, which now have significant paper profits due to their extremely inflated length. Large scale CTA selling activity will only begin below $2,580/oz.”
“Since bearish momentum will likely only accelerate below this threshold, other groups will have to do the heavy lifting. Overall, this suggests that the most vulnerable groups are ETF holders, given their recent inflows, and traders of Shanghai, which still maintain their almost record length.”
“Let’s not forget how significant TINA has been for this group: recent weeks have seen significant selling activity in Shanghai concurrent with improving Chinese sentiment. Silver, on the other hand, is more vulnerable to selling activity from the CTAs in a continued downtrend, but even a flat trend will likely lead trend following algorithms to reaccumulate their recently reduced length.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
