Key Points
Gold futures are trading above $1950 comfortably after USD declined due to ease in the banking crisis and softer Germanys inflation..
The speculative position (net long position- net short position)is very low compared to Jan high when Silver was around 73000, at that time the speculative long position was around 31K while right now its at 3.5K indicating that participants are reluctant to take long positions at such high levels..
Going forward, gold will be in a sweet spot as inflation will continue to remain elevated and the US Fed will be forced either to cut rates or pause their rate hike due to banking stress..
Both augurs well for gold. Even if there is a new banking crisis which will propel USD higher, gold will also gain due to risk off sentiment so we dont see any major correction in gold for the time being..
Despites strong outlook in the near term, we are not comfortable in holding a naked long position at current levels as gold is due for some correction around its support zone of 58400..
