Gold Traders Bet Long Despite Record Highs in Global Stocks

Gold prices reached as high as $1,950 an ounce, at London’s trading session on Wednesday as gold traders created fresh positions on the precious metal.

At previous trading session, Gold prices drifted lower on higher U.S yields amid COVID- 19 vaccine optimism, and positive macros coming from the US-China trade front however that changed when gold bulls triggered the upward movement of the yellow metal prices on growing geopolitical concerns

Gold traders are presently looking toward the U.S Federal Reserve chairman’s speech at Jackson Hole scheduled to hold tomorrow, thereby keeping gold prices above the $1925 support levels today.

The precious metal however remains fragile to the prevailing macros that include a recent uptick in US interest rates, especially the 10-year yield, putting more pressure on the yellow metal.

Gold traders have noticed a significant liquidation of long positions whenever gold touches the $1,950 price level in recent days, showing a sign of price rejection and exhaustion by gold bulls prior to the recent high hopes on the two major economies negotiating a trade deal.

In addition, record highs in risker assets such as global equities and higher hopes on the COVID-19 vaccine being readily available could most likely push the precious metal below the $1800 price support levels and further if risker assets continue printing impressive highs.

The greenback’s recent weakness is not having much a price effect on the yellow metal as it should ,adding more pressure on gold bulls that the yellow metal seem to be in an overbought position partially due to the “risk-on” nature of the soft greenback sell-off as it’s not as damaging as anticipated.

Gold traders are presently positioning their bets for a limited upside impact from an announcement of a soft average inflation target. It has been well-telegraphed by the recent U.S Federal Reserve public statements.

For a look at all of today’s economic events, check out our economic calendar.