Gold is sitting at $1565.75 while the context for the yellow metal is a market where traders are holding long, but not large positions, according to strategists at TD Securities.
Key quotes
“Gold is a crowded trade. The bull market narrative is widely acknowledged, which translates to an above-average number of traders holding a long position, although the average trader’s position size is not excessive, suggesting that greed is not widespread.”
“The risk to gold bugs is a change in narrative that would prompt a decline in the number of traders long. A reversal of recent safe-haven flows driven by fears that the Wuhan coronavirus could contaminate global reflation appears to be an obvious candidate for a narrative-driven reversal.
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