Gold Xauusd Recent Upswing Is Lacking Fundamental Support

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Gold Xauusd Recent Upswing Is Lacking Fundamental Support

Gold (XAUUSD) Recent Upswing Is Lacking Fundamental Support

The analysts at Commerzbank have recently shared their option about Gold on how it lacks fundamental support despite turning bullish recently. After the release of labour market data in the USA, the price of Gold increased to around $1680 and experts believe that a weaker US dollar is also pushing the yellow metal higher.

However, the ETF outflows in the Gold continue to weigh on the bullish price action, which is not a good sign. In fact, Commerzbank believes that this bullish move is more likely an attempt to cover the short positions in Gold.

By the end of the last trading week, Gold (XAUUSD) gained 2.2% thanks to the depreciation of the greenback. Considering the increase in the October employment numbers, the rise in Gold was remarkable. It appears that the market participants are paying little attention to the increase in employment and are focusing towards the increase in the overall unemployment rate.

The most likely reason for this recent increase in Gold prices is to cover the short positions. Looking back at the data from the last few days, around 40000 contracts were speculative short positions which is a little bit lower than the contracts of September.

So this means that outflows were registered in the Gold ETFs by the end of the previouGoldek which further intensified after the recent Fed meeting.

For now, the US economic condition is not good, but the USD is getting stronger due to the actions were taken by the Fed. Whenever the USD gets stronger, it automatically pushes the gold lower. However, we have already seen how the gold fought back recently as soon as the USD turned a little bearish.

Furthermore, the long-term trend of XAUUSD becomes clear if you load the monthly charts... Historically, USD has been losing against Gold since the former can be printed on demand, but gold is in finite quantity only.

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