- SWFX traders are 52% bearish
- 67% of pending commands are to buy the metal
- The bullion opened at 1,257.09
-
Upcoming Events: US ADP Non-Farm Employment Change; US ISM Non-Manufacturing PMI; US FOMC Statement; US Federal Funds Rate
The bullions recent moves were easy to forecast, as a strong support cluster keeps the rate from falling. However, on Wednesday that is about to change, as loads of fundamental data will affect the pricing of the yellow metal. At the forefront of the releases will be the Federal Reserve and the FOMC Statement with the Federal Funds Rate announcement.
The Purchasing Managers' Index for the US manufacturing sector grew less than analysts estimated. According to the Institute for Supply Management, the PMI lost 2.4% compared to the previous month and tumbled to 54.8%, while experts anticipated only a slight decrease of 0.6%. Although in April the PMI rose at the slowest pace this year so far, it still remained above the 12-month average of 53.6%. The ISM report showed that the New Orders, Employment and Supplier Deliveries Indices dropped 7.0%, 6.9% and 0.8%, accordingly. Meanwhile, both Inventories and Prices Indices posted a 2% advance, which indicated that manufacturing companies stockpiled more raw materials than in the previous month and their costs increased.
Watch More: Dukascopy TV
Upcoming events: FOMC
The main focus of the day will be on US data. First of all at 12:15 GMT ADP Non-Farm Employment data will be out. The release will be covered by the Dukascopy research team. Secondly, the ISM Non-Manufacturing PMI will be out at 14:00 GMT. Although, the top release in focus will be the FOMC Statement and the Federal Funds Rate at 18:00 GMT.
Read More: Fundamental Analysis
Gold continues lower
The yellow metal's price is fluctuating, as forecasted. The metal hit the support cluster below it near the 1,252 level and made a slight rebound. On Wednesday morning the metal traded above the support cluster, which is made up of the 55 and 200-day SMAs, the weekly S2, the lower trend line of a medium scale descending channel and the 50.00% Fibonacci retracement level. All of these levels of significance make the 1,250 mark a strong foundation for the bullion. Due to that it is even unlikely that the will pass this support soon.
Daily chart
The hourly chart clearly shows that the bullion is continuing lower in the before mentioned descending channel pattern. However, it has not touched the lower trend line of the pattern. It was rather the 200-day SMA, which provided the support for a rebound. Due to that reason a decline is still technically possible faster than it could be expected by analyzing the daily chart.Hourly chart
Read More: Technical Analysis
Bulls show dominance
SWFX market sentiment remains unchanged, as 52% of open positions are short, and 67% of trader set up orders are to buy.
OANDA Gold traders are bullish regarding the metal, as open positions are 59.81% long on Wednesday, compared to 61.08% previously. Meanwhile, traders of SAXO bank are also bullish, as 64.46% of open positions are long, compared to 64.93% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being below 1,350 in early August
© Dukascopy Bank SATraders who were asked regarding their longer-term views on gold between April 3 and May 3 expect, on average, to see the metal near 1,350 in early August. Generally, 64% (+1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 32% of those surveyed reckon the metal will trade in the range between 1,100 and 1,300 over the next three months.