Gold Price Forecast: XAUUSD’s latest upswing lacks one important fundament support – Commerzbank

Gold price climbed to $1,680 following the publication of US labour market data on Friday. As strategists at Commerzbank note, a weaker US Dollar pushes up the yellow metal but ETF outflows continue to weigh on price. 

Latest surge likely attributable to covering of speculative short positions

“Gold was up by 2.2% at the end of the week’s trading. The upswing was boosted by the depreciation of the USD. This is remarkable given the renewed sharp rise in US employment in October, plus a marked upward revision of the previous month’s figure. It seems that market participants were focusing more on the steeper-than-expected rise in the US unemployment rate.” 

“The latest surge in the Gold is likely to have been attributable to covering of speculative short positions. They amounted to a good 40,000 contracts just a few days earlier, according to the CFTC, putting them only marginally below their late-September high. By contrast, gold ETFs registered sizeable outflows at the end of last week, which picked up pace in the wake of the Fed meeting. The upswing in the gold price is thus lacking one important fundament support.”