Gold holds above $1,800 but any major upside push likely to be elusive for now

Gold keeps steady just above $1,800 in trading today

For now, buyers are keeping near-term control as price holds above $1,800 as well as the 200-hour moving average (blue line) closer to $1,804.

The dollar’s sluggishness and commodities push have helped gold to rebound a little to start the week but any sustained upside momentum may still prove to be elusive for the yellow metal in the bigger picture.

Gold H1 23-02

As things stand, gold is keeping a modest bounce upon testing the 30 November low @ $1,764.80 last week. But in the context of price action since peaking in August last year, gold has been trading more sideways at best.

Even the seasonal tailwind in December to January also failed to really provide much of a spark and the lack of enthusiasm is more clearly highlighted by ETF positioning:

Gold D1 23-02
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The run in gold last year towards peaking over $2,000 relied heavily on a surge in ETF buying flows but as we look towards the closing stages of February, positions look to be trimmed for a fifth consecutive month.

As much as I have been an advocate for gold’s long-term prospects in the past, this is one of the biggest reasons why myself (and many others) have turned their back on the yellow metal since the turn of the year.

This slow and steady correction in positioning may lead to a healthier push higher in the long-run, but not before some potential short-term pain as long as the trend continues down this path in the coming weeks/months.

As such, the lofty highs for gold may not be targeting above $2,000 anymore but there’s still a good chance for gold to recover strongly towards $1,900 levels once the positioning flush that we are seeing now completes its course.

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