The latest consignment of the CFTC Positioning report indicates that there has been an increase in the number of net long positions in gold, sending it to levels last seen in Late February 2021. The decision by speculators to increase their net long positions on the yellow metal stemmed from the drop in US bond yields for the period leading up to 11 May.
Despite a corresponding increase in USD longs, the gold price has topped the $1850 price mark, as the increase in speculative interest in gold overshadowed that of the greenback. The USD found itself on the back foot after the Fed confirmed its dovish stance on rates and QE tapering, enabling US long-term bond yields to pull back from its April highs.
Gold price on the XAU/USD chart is presently up by 0.58% as of writing.
Gold price has broken above the resistance wall found between 1828 and 1840, paving the way for a continuation of the price recovery towards the 1860.77 resistance. If bulls can breach this resistance level, 1881.68 becomes the new resistance target. Above this level, 1900.95 assumes the role of a new target, being a psychological price point.
On the flip side, if gold price ascent fails to break beyond 1860, we could see a further dip towards 1840.00 initially, with 1815.20 and 1789.49 coming into the picture once more if the price wall between 1840 and 1828 gives way.
