Traders scaled back their open interest positions by nearly 5.2K contracts on Wednesday according to flash data from CME Group. In the same line, volume shrunk by around 13.3K contracts, resuming the downside after Tuesday’s build.

Gold supported by short covering

Wednesday’s uptick in the price of the ounce troy of the precious metal was on the back of declining open interest and volume, signalling the presence of short covering fuelling the move. Against this backdrop, further upside in gold is expected to meet strong resistance near $1,650 per ounce.