Gold prices fell almost 0.7 percent on Monday marking the worst 24-hour period in over one month. In response, retail traders decreased their downside exposure. This can be seen by taking a look at IG Client Sentiment (IGCS), which often functions as a contrarian indicator. With that in mind, could further pain be in store for the yellow metal?
Gold Sentiment Outlook – Bearish
The IGCS gauge shows that about 71% of retail traders are net-long gold. Since most of them remain biased higher, this hints that prices may continue lower down the road. This is as downside exposure decreased by 9.17% and 3.69% compared to yesterday and last week, respectively. With that in mind, the combination of overall exposure and recent changes produces a stronger bearish contrarian trading bias.
