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Positioning squeeze has taken place as the bulls feeling the heat bail out in droves, triggering stop losses to the bottom of the abyss. 

Gold is currently trading down 5.8% at $1,916, falling from a high of $2,029.98 on the day.

The bullish gold narrative has used up much of the dry-powder for the bulls, and while in aggregate positioning is not yet extreme, position sizes are bloated,

analysts at TD Securities explained.

Gold looks to complete a 61.8% Fib retracement


Further, gold’s reaction function to real rates has shifted from a linear to a convex relationship, which could add to the pain as real rates ebb higher,

the analysts at TDS explained further.

Real rates have been on the incline since last week’s Nonfarm Payrolls report which beat expectations. This, in the main, has also given the US dollar a boost, making a double bottom in the 4HR charts.