Gold Price Prediction – Prices Slip as the Dollar gains Traction

Gold prices edged lower on Monday as the dollar eased and US yields moved higher.  Hedge funds reduced short positions in futures and options according to the latest Commitment of Traders report according to the CFTC. Speculators ended their six-week accumulating spree in the euro futures.  This has led to some profit-taking in dollar short positions.

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Technical analysis

Gold prices edged lower and continued to consolidate. Prices were unable to recapture support near the 10-day moving average at 1,928. Target support is seen near the 50-day moving average at 1,867. Medium-term momentum remains negative as the MACD histogram is printing in the red with a sliding trajectory which points to lower prices. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal, and continues to accelerate lower. The relative strength index also broke down which reflects accelerating negative momentum.

Hedge Funds Reduced Short Positions in Futures and Options

Hedge funds reduced short position and long position in futures and options according to the latest commitment of traders report released by the CFTC for the date ending August 18, 2020. According to the CTTC, hedge funds reduced short position2 in futures and options by 5.3K contracts while reducing long positions by only 529 contracts.