Gold Prices Decline: Retail Traders Bullish but Signals Bearish Market
Gold prices concluded a fourth consecutive week of losses this past Friday, down about 3.6 percent. According to DailyFX currency analyst Daniel Dubrovsky, retail traders have become increasingly bullish on gold, which may be a bearish signal for the precious metal. The IG Client Sentiment (IGCS) indicator shows that about 81% of retail traders are net-long gold, suggesting further price falls. Dubrovsky points out that the rising trendline from February and the falling trendline from April further reinforce the bearish outlook.
In terms of immediate resistance, the 38.2% Fibonacci retracement level of $1903 is identified. Breaking above this level may lead to a revisit of the falling trendline and a renewed downside focus. On the other hand, extending losses could push the focus towards the support level at the midpoint of the Fibonacci retracement, which stands at 1848.
As of the latest session, spot gold was trading at $1897.07, showing a slight increase of 0.12%.