- Opened positions for Gold remain strongly positive (75% bullish / 25% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,221
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,210
- Upcoming events on January 8: Eurozone Retail Sales, Germany Factory Orders, US Unemployment Claims, UK BoE Official Bank Rate and Asset Purchase Facility, Australian Retail Sales
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Gold price eased slightly on Wednesday amid ongoing concerns over Greece's political crisis and the country's future in the currency bloc, while investors await the Fed's meeting minutes later in the day for hints on the timing of a rate hike. Expectations of higher interest rates are considered bearish for bullion, as the yellow metal struggles to compete with yield-bearing assets when rates rise. Another driver for the precious metal's performance this week will be Friday's US non-farm payrolls report, which will indicate the strength of the labour market recovery in the world's number one economy.
Among already released fundamentals, US services sector activity rose at the slowest pace in six months in December, sparking concerns over the economic outlook heading into 2015. The Institute for Supply Management's non-manufacturing PMI dropped 3.1 percentage points to 56.2 in December, down from 59.3 registered in the previous month and compared to Wall Street's forecast for a 58.2 reading.
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No changes expected from BoE on interest rates tomorrow
The most important event on Thursday of present week is considered to be the Bank of England's decision on the main interest rate and asset purchase facility. Even though they are predicted to stay without any changes for now, market volatility is likely to increase during publication of this news. Besides that, Eurozone and Australia will announce retail sales statistics for November as they are forecasted to come positive for both. US Department for Labor, however, will release numbers on jobless claims for the previous week.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
XAU/USD cross showed a bullish development for a third consecutive day back on Tuesday of this week, as it breached the weekly R1 resistance line and went even further to the upside. The price has also hit the long-term down-trend line around $1,223, which sent Gold slightly to the south later during the trading. For now we do not expect this resistance to be crossed in the near term, while bears may gain enough strength to commence a correction period. Moreover, technical indicators on daily, weekly and monthly charts are bearish at the moment.
Hourly chart
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Read More: Technical Analysis
Long opened positions unchanged at 12-day high
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 7 and Jan 7 expect, on average, to see Gold trading around 1,200 by the end of April. At the same time, 53% of them believe the bullion will be above this mark in three months, while 27% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA