Gold - the biggest series of declining days in over a year

The price of gold begins the beginning of August with a continuation of the sell-off on global markets, which brings the sixth day of declines in a row. We have not observed such a series of declining days in the price of gold since August 2022. It seems that gold resisted the strength of the dollar and the yield of American bonds for quite a long time to capitulate recently.

Capital outflows from gold ETF (GLD)

On Monday, October 2, at noon, an ounce of gold costs USD 1850 and this is the lowest price since March 10, 2023, and the quotations may not be helped by further information that investors are abandoning units of the largest ETF for gold, i.e. GLD. Last week, USD 321 million flowed out of it, in a month it was USD 784 million, and over three months, over USD 3,2 billion diverted from GLD. Thus, the value of assets under management decreased to USD 52 billion. Since its peak in May, the price of gold has fallen by more than 11%.

Decrease in net speculative positions in gold

According to the commission's COT report CFTC speculators have been reducing net long positions on gold contracts in recent weeks. At the peak for gold there were 184. (so much more long than short for non-commercial players), and currently it is 115 thousand. contracts. Nevertheless, the behavior of the gold price and positioning overlaps quite well and there are no major divergences here.

Potential support for the gold price and important levels

From a chart point of view, potential support for the gold price may be below the February 2023 low, i.e. around USD 1800, and may extend up to USD 1720. Meanwhile, the nearest resistance levels may be around USD 1880 to USD 1900. It seems that the quotations in the near future may be influenced by the situation on the US dollar market and bond yields, all in the context of the Fed's actions at the beginning of November (over 30% chance of a rate increase). The most important data for gold is probably the publication of US data on employment changes in non-agricultural sectors, which will be released on Friday.