Gold Price Prediction – Prices Consolidate Following Friday’s Breakout
Hedge funds remain long gold
Gold prices moved sideways edging lower on Monday, as the dollar continues to trading under pressure. The Bond markets in the United States were closed on Monday in observance of the Columbus Day holiday. Hedge funds remain long gold futures and options and barely changed their position according to the latest commitment of traders report released for the date ending October 6, 2020.
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Technical analysis
Gold prices consolidated on Monday after breaking out on Friday as the dollar tumbled. Prices held the break out level near trend line resistance which is now short-term support near 1,912. Resistance is seen near the 50-day moving average at 1,938. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line. The MACD histogram also generated a crossover buy signal rising above the zero-index line. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal in the middle of the neutral range.
Hedge Funds Remain Long
Hedge funds barely changed their position in futures and options according to the latest Commitment of Traders Report released for the date ending October 6, 2020. According to the CFTC, managed money slightly reduced short position while slightly increasing long position. Open interest that is long gold futures and options outnumbers managed money that is short futues and options by a ratio of 4 to 1.
