TechFlow, April 28 — Gold prices extended their decline from last week's record highs, as signs emerged that the explosive rally may have been too strong and too fast, prompting traders to unwind positions. During early Asian trading hours, gold dropped 0.4% to around $3,305, falling over 5% from its peak of more than $3,500 set last Wednesday.
Barclays noted that shifts in options positioning—last week's trading volume in SPDR Gold Shares ETF surpassed a record 1.3 million contracts—may indicate short-term market overheating, as price moves have outpaced fundamental factors such as the U.S. dollar and real interest rates. "We expect gold prices to fall," said Barclays analyst Stefano Pascale, "technically, the market has started to look a bit overextended." Meanwhile, the latest data from the U.S. Commodity Futures Trading Commission (CFTC) shows hedge funds have reduced their net long positions in gold futures and options to the lowest level in 14 months.
