Gold traded back above $1,200/oz but has yet to show enough strength to challenge resistance and with that, hedge funds bears who held a record short of 7.9 million ounces in the week to September 4. Having been continued sellers since May, ETF investors have yet to show any renewed appetite for gold. Despite having seen gold stabilise in recent weeks, total holdings have nevertheless dropped to 2,105 tons, a one-year low.
Silver and platinum, meanwhile, have both yet to show any sign of renewed strength with their price relative to gold still hovering near multi-year lows. Traders will continue to look to the dollar for direction, and particularly to USDCNY as gold has maintained a high positive correlation to the Chinese currency of late.
CNY, of course, remains a key indicator of developments on the trade war front.
The US FOMC is poised to raise interest rates on September 26 and the market may continue to struggle ahead of this event.
Gold has traded around $1,200/oz for the past five weeks as it continues to stabilise following the $200/oz sell-off between April and August. Those having sold gold have so far not had any reasons to worry and from a technical perspective the market needs to break above $1,220/oz – and more importantly $1,238/oz – for that outlook to change.