- Opened positions for Gold are positive (66% bullish / 34% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,188
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,180
- Upcoming events on January 3-5: Australian AIG Performance of Manufacturing Index, German Retail Sales and Prelim CPI, Japanese Monetary Base, US 3 and 6-Month Bill Auction
© Dukascopy Bank SA
Gold continues to shine as a safe-haven asset, despite the strengthening US Dollar and falling commodity market. The yellow metal climbed on Friday amid higher oil prices, but bullion is set for the third weekly loss, as a rising Greenback continues to put a substantial pressure on the precious metal. Analysts project another difficult year for gold, with the Dollar seen to appreciate further amid expectations of higher interest rates in the US due to robust economic growth, while global deflationary concerns as well as weakening China's demand will continue hurting gold prices.
The number of Americans filing new applications for unemployment benefits rose more than expected last week, but the underlying trend remained consisted with sustained strength in the jobs market. Initial claims for state jobless aid soared by 17,000 to a seasonally adjusted 298,000 for the week ended December 27, the Labor Department said, following four consecutive weeks of drops.
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News from Australia and US to influence Gold price on Monday
The beginning of the next working week on January 5 is already expected to bring a number of important economic news, as they all are likely to have influence on the price of yellow metal. At first, in the night between Sunday and Monday the AIG will release its index to show activity in the production sector of Australia. It will be followed by German retail sales and inflation data. Moreover, on Monday the US Treasury holds an auction to sell government bonds with maturity of three and six months.Read More: Fundamental Analysis
XAU/USD returns back below down-trend
The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend and developed above this level for the past week. However, on December 15 Gold returned back, mostly amid fundamental factors. At the moment the most considerable resistance is represented by this long-term downtrend line, which is currently located at $1,225 and strengthened by the 100-day SMA and 38.2% Fibonacci retracement. Therefore, in course of first months of 2015 Gold is suggested to lose value.Daily chart
© Dukascopy Bank SA
On Wednesday, the bullion declined once again and pierced through a considerable support lines' area around $1,190, then represented by the weekly PP and 23.6% Fibo retracement. At the moment these lines, accompanied by the new monthly PP, 20 and 55-day SMAs are acting as a very strong supply zone, which may push Gold further to the downside. In the near term the yellow metal is likely to try to return back up to $1,200, but we tend to believe technical indicators, which are now giving bearish signals on all time-frames.
Hourly chart
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Read More: Technical Analysis
Long opened positions decline down to 66%
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 2 and Jan 2 expect, on average, to see Gold trading slightly below 1,200 by the end of April. At the same time, 49% of them believe the bullion will be above this mark in three months, while 30% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA