“As expected, gold specs cut net length last week, re-entering short positions and liquidating longs as a hawkish Powell saw the dollar make new highs,” TD Securities said in a recently published report assessing the latest weekly CFTC report.
Key quotes
“But shortly after printing the $1200/oz mark, the yellow metal was rescued by safe haven bids and short covering. Indeed, European politics in the form of thorny Brexit negotiations provided some interest, while Fed speakers on Friday sounded a much more dovish tone in regards to a global slowdown which saw the greenback and rates come off the highs.”
“These factors should provide short term support, but we maintain the view that a fundamental shift in the strong dollar regime will be needed before gold can break materially higher.”
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