- Opened positions for Gold are strongly positive (75% bullish / 25% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,205
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,168
- Upcoming events: Bank of Japan's Monthly Economic Survey, German Unemployment Change, Eurozone Consumer Confidence, US Existing Home Sales, New Zealand Trade Balance
Among influencing fundamental factors, the number of Americans seeking first-time unemployment benefits declined last week and remained near the lowest level in 14 years, the latest sign of strengthening labour market. Jobless claims fell by 6,000 to 289,000 in the week ended December 13, the fewest since early November, a Labor Department report showed. New applications for unemployment benefits have stayed below the 300,000 threshold in 13 of the past 14 weeks, the longest such streak since the first half of 2000. The four-week moving average, which irons out volatile weekly data, declined to 298,750.
In the meantime, the US services sector activity slowed in December, as the preliminary PMI gauge for the services industry dropped to 53.6 down from the final 56.2 a month earlier. That was the lowest reading since February, extending the drop seen since the index climbed to a cyclical peak in the low-60s in June. The sub-component measuring price growth declined to the weakest level since March last year.
Gold to be driven by US, German data on Monday
The pre-Christmas season is not bringing a big number of fundamental news from around the world; however, Monday of the next week will be marked by a few important indicators, which Gold traders should take into account. US housing statistics will reveal sales of existing homes in the country in November, as they are expected to grow further, thus creating risks for prices of the yellow metal, which is considered as a safe-haven asset. Besides that, New Zealand will have data on trade balance for November, joined by the Westpac consumer sentiment survey for the Q3.XAU/USD returns back below down-trend
Yesterday, the XAU/USD cross traded almost completely unchanged, compared to previous two days, as Gold's price remained well-supported by the weekly S1 at $1,193 and limited by the monthly R1 at $1,205 from the upside. Daily technical indicators are still giving neutral signals, meaning that we can expect no major changes during the next 24 hours, but in the medium-term XAU/USD pair is likely to lose value.Daily chart
On Thursday, Gold increased in price and was able to jump above the monthly R1, reaching the daily high around $1,214. At the same time, the price managed to stabilize and returned back just above the weekly S1 towards the end of the trading session. Taking into account mixed daily technical indicators and rather strong resistances and supports around the current trading level, we would suggest it to hover sideways in the foreseeable future.
Hourly chart
Long opened positions stay stable at 75%
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Nov 19 and Dec 19 expect, on average, to see Gold trading just below 1,200 by the mid-March. At the same time, 49% of them believe the bullion will be above this mark in three months, while one third of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.