Gold Price Forecast: Setback potential for XAU/USD on upside inflation surprise – Commerzbank
|The strong rise in the price of Gold since the beginning of March has been facilitated by purchases on the part of speculative financial investors, economists at Commerzbank say.
Sharp rise in speculative net long positions in Gold
According to the CFTC statistics on market positioning published on Friday, the net long positions of speculative financial investors rose to 109.8 thousand contracts in the week up to and including March 5, which almost doubled and corresponded to purchases of the equivalent of 167 tons of gold on the futures market within a week.
As the Gold price has risen by a further 3% since the reporting date, speculative net long positions are also likely to have increased again. However, this also increases the setback potential for the Gold price should these short-term oriented investors take profits. One trigger could be today's US inflation data, should it surprise to the upside and thus put a damper on expectations of interest rate cuts.
The Relative Strength Index (RSI), which has risen to an extremely high level, also calls for caution, indicating a short-term overshooting.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.