Jump to content

Gold, Silver Price Forecast: Retail Traders Remain Long Despite the Downside Risks


Recommended Posts


  • Fundamental analysis hints gold, silver may continue falling
  • Retail trader bets offer upside view on gold, downside for silver
  • How are technicals aligning with the fundamentals, positioning?

Gold and Silver prices have been struggling to find upside momentum in recent weeks amid global efforts from central banks to tame high inflation. This is making for a difficult fundamental environment for these anti-fiat precious metals. How have retail traders been positioning themselves in XAU/USD and XAG/USD amid recent price action and what could that mean for the road ahead? For a deeper dive into the analysis, check out this week’s webinar recording above.


The IGCS gauge shows that about 81% of retail traders are net-long gold. IGCS tends to function as a contrarian indicator. As such, the fact that traders remain net-long hints prices may continue falling. However, short bets have climbed by 2.2% and 20.32% compared to yesterday and last week respectively. With that in mind, recent changes in sentiment warn that gold could reverse higher.

Gold, Silver Price Forecast: Retail Traders Remain Long Despite the Downside Risks


On the daily chart, XAU/USD remains in a downtrend since early March, but recent price action is looking neutral. The yellow metal appears to be consolidating between resistance (1869 – 1879) and support (1787 – 1810). In fact, it seems that gold could form a Bearish Rectangle. Breaking under the range of support could be a sign of downtrend resumption. That would place the focus on lows from December. Otherwise, pushing above resistance could shift the outlook increasingly bullish.

Gold, Silver Price Forecast: Retail Traders Remain Long Despite the Downside Risks

Chart Created in Trading View


The IGCS gauge shows that roughly 95% of retail investors are net-long silver. Since nearly the absolute majority of traders are positioned to the upside, this is a sign that prices may continue falling. Downside exposure has been falling recently, declining by 12.79% and 33.92% versus yesterday and last week respectively. With that in mind, the combination of current readings and recent changes in IGCS hint that Silver may remain biased to the downside.

Gold, Silver Price Forecast: Retail Traders Remain Long Despite the Downside Risks


Similar to gold, silver prices have been in a downtrend since early March. Recent price action has been looking neutral as well. A Bearish Death Cross remains between the 20- and 50-day Simple Moving Averages (SMAs), offering a downside bias. Key support seems to be the May low at 20.46. Clearing the latter exposes the midpoint of the Fibonacci extension at 19.63. Otherwise, clearing resistance (22.20 – 22.51) opens the door to a bullish technical outlook.

Gold, Silver Price Forecast: Retail Traders Remain Long Despite the Downside Risks

Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from June 21st Report

Daniel Dubrovsky, Strategist for DailyFX.com
22 June 2022

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 08/02/23 10:46
  • Posts

    • Did Powell cap interest rate expectations and in turn revive the Dow and other risk benchmarks? More likely, fed rate expectations fueled by last week’s strong data run has likely find a natural equilibrium; but that means risk trends and the Dollar need a new guiding fundamental light to render tentative breaks into viable trends.              
    • I don't think the IG spreadsheet is supported anymore and like you have discovered it is tricky and time-consuming to get working. I've lots of experience using Excel for financial markets/trading purposes as well as using the IG API. I've built an Excel Add-in which makes using Excel with IG much easier, you don't need to deal with DDE, RTD etc. you can just use standard Excel formulas: https://www.excelpricefeed.com/ I think Excel is great for analysing prices, backtesting, modelling, generating signales etc. but I would not suggest that you try to use it for actual trading. Andy
    • Gold price and oil price rally, as lumber price drops back Gold and oil have managed to push higher, recovering some of last week’s losses. Meanwhile, lumber has fallen again. Source: Bloomberg  Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 08 February 2023  Gold pushes higher After the steep losses of Thursday and Friday, the price has attempted to edge higher. A higher low could be in the process of forming, though if the price breaches $1861 this view would be cancelled out. This would then bring the 50-day simple moving average (SMA) into view, and may well result in additional losses down towards $1800. A weaker US dollar might provide hope of a bounce that could set up a move back towards $1950. Source: ProRealTime WTI moves back above 50-day MA US crude oil has clawed back Friday’s losses, rebounding from the lows of the week. Having held the $72.80 area that was also support in early January, a move back towards the 100-day SMA could be in the offing. Above this, the January highs around $82 act as possible resistance. Having prompted a reversal that, for the moment, cancels out a bearish view, buyers will want to see a move above $84 if they are to lay the foundations of a move towards the 200-day SMA. A drop back below $72 is needed to revive the bearish view which seemed so strong on Friday, and would then open the way to $70 and lower. Source: ProRealTime Lumber losses accelerate After another day of losses, a lower high for lumber could be in place. A reversal from below the 200-day SMA would seem to bolster the bearish case, especially since the price failed to break above 54,000. This had acted as resistance back in October as well. Further declines target the 100-day and 50-day SMAs, before moving to the January low around 36,400. Buyers will need to see a move above 54,000 and the 200-day SMA to suggest that a more bullish view prevails. Source: ProRealTime
  • Create New...