Mingze Wu | Sep 30, 2013 02:25AM ET
Gold prices rallied on open today following the political fiasco in US over the weekend. However, prices were not able to hold onto the gains, suggesting that the overall bearish pressure is huge even though short-term trend is bullish based on the recovery from last week’s 1,305 low.
Hourly Chart
Weekly Chart
Fundamentally, it is strange to see latest CFTC Commitment of Traders numbers net long positions have actually grew, breaking the streak of 3 consecutive weeks of decline. However, it should be noted that the numbers were taken from Tuesday, exactly where last week’s bullish recovery began. Therefore, this is by no means a confirmation that market is still bullish with 1,340 continue to hold firm. Instead, traders may wish to focus on this week’s numbers for a better gauge of speculative action. Should Net Long positions fall, coupled with prices breaking 1,330 by the end of this Tuesday, this may be a good indication that institutional speculators are favoring a longer term bear. Conversely, should prices actually break 1,340 (preferably above this morning’s swing high) with a higher Net Long positions, we will be in a better position for stronger bullish correction that may lead us to Channel Bottom of weekly chart which is around 1,360 – 1,370 next week.
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