- Opened positions for Gold remain strongly positive (75% bullish / 25% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,254
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,229
- Upcoming events on January 14: Eurozone Industrial Production, US Core Retail Sales and Crude Oil Inventories, China New Loans, Japan Core Machinery Orders
Gold extended a rally on Tuesday and rose to the highest level since October 2014, as falling oil prices and political uncertainty in Europe force investors to seek shelter. The SPDR Gold Trust reported that its gold holdings remained unchanged at 707.82 tons on Monday. Nevertheless, Barclays expect bullion to remain bearish in 2015, as the precious metal battles with a strong US Dollar and the first Fed interest rate increase in nine years. Barclays expects gold prices to fell to $1,130 per ounce in the September quarter, for the first time since April 2010, as disinvestment in gold increases. For the whole 2015, the bank forecasts gold prices to average $1,170 per ounce.
The US, the world's biggest economy is seen growing 3.2% or even more in 2015, the best performance since 2005, as a strengthening job market underpin consumer spending. Around 3 million Americans were employed in 2014, the most in 15 years, reinforcing the view US companies believe US demand will persist even as foreign markets struggle.
US retail sales to influence bullion on January 14
Besides important fundamental statistics that is due to be published on January 14 in the Eurozone, China and Japan, market participants will be closely watching data from the United States concerning change in retail sales for December. This data is assumed to have the most impact on Gold as a safe-haven asset, given that a potential strong performance may trigger sell-offs of the yellow metal tomorrow, vice versa.XAU/USD keeps medium-term bullish momentum
The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend at $1,218 and started to develop above this line again on January 9. At the moment it is hard to say whether Gold is able to return back below this level. If the bullion consolidates above it, then we may see metal's further increase in the medium-term, with the goal at 50% Fibonacci retracement at $1,260. Nevertheless, the long-term outlook for the yellow metal tends to remain negative, mostly reflecting strength of US fundamental factors. Therefore, in course of first months of 2015 Gold is still suggested to lose value, which may follow the present rebound soon.Daily chart
A strong bullish tendency for Gold continued on Monday, as XAU/USD cross passed through a major resistance line represented by the monthly R1 at $1,233, as well as the 38.2% Fibonacci retracement just below it. At the moment Gold is trying to penetrate the weekly R1 at $1,238. If successful, we see it growing in price even more and reaching the weekly R1/55-day SMA at $1,254. Judging from technical indicators, however, the metal may stay unchanged for some time, before eventually resuming trading in the bearish trend.
Hourly chart
Long opened positions return back to 75%
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 13 and Jan 13 expect, on average, to see Gold trading around 1,220 by the end of April. At the same time, 44% of them believe the bullion will be above 1,250 in three months, while 26% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.