Gold Risks Larger Correction Amid Adjustment in Speculative Position

Gold Talking Points

Gold trades near the monthly-high ($12330) even as the rout in risk appetite dissipates, and the recent pickup in volatility keeps the topside targets on the radar as bullion snaps the downward trend from earlier this year.

Image of daily change for financial markets

Gold Risks Larger Correction Amid Adjustment in Speculative Position

Image of daily change for gold prices

The near-term outlook for gold remains supportive as bullion breaks out of the range-bound price action carried over from the previous month, and the recent developments appear to be isolated to bullion especially as silver prices continue to track the opening range for October.

Gold prices may stage a larger correction over the coming days as there appears to be a broader shift in market behavior, and traders may pay increased attention to the precious metal as safe-haven currencies like the Swiss franc also show a limited response to the gyrations in risk sentiment. In turn, bullion may continue to move to the beat of its own drum as there appears to be a wave of short-covering, with the most recent CFTC Commitments of Traders (CoT) report

Article source: https://www.dailyfx.com/forex/fundamental/us_dollar_index/daily_dollar/2018/10/16/Gold-Risks-Larger-Correction-Amid-Adjustment-in-Speculative-Position.html