- SWFX traders are 55% bearish
- 64% of pending commands are to buy the metal
- The bullion opened at 1,291.36
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Upcoming Events: US Crude Oil Inventories
The metal keeps encountering resistance just above the 1,290 mark. However, throughout the week it can be observed that a range has been established. Most likely markets are expecting the outcome of the French presidential election. Moreover, the turmoil in Korean peninsula does not seem to be close to a solution. Meanwhile, from a technical perspective the yellow metal's price is still set to surge to the 1,300 mark.
US homebuilding activity dropped more than expected last month amid the unusually warm weather and weaker manufacturing activity, official figures revealed on Tuesday. The US Department of Commerce reported that housing starts fell 6.8% to a seasonally adjusted rate of 1.22M, as construction of single-family homes in the Midwest posted the largest decline since 2014. Meanwhile, market analysts anticipated a slighter drop to a 1.25M unit rate in March, following the preceding month's upwardly revised 1.30M unit rate. On an annual basis, housing starts were up 9.2%. Data also showed that building permits climbed to a 1.26M unit rate in March, compared to the previous month's upwardly revised 1.22M unit rate, whereas analysts expected a rise to 1.25M unit rate.
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Upcoming events: US Crude Oil Inventories
The only data release, which might interest fundamental data traders, will be the publication of the US Crude Oil Inventories at 14:30 GMT. This data mainly affects the price of crude oil. However, some argue that it also has an effect on gold prices.
Read More: Fundamental Analysis
Gold trades below 1,290 mark
On Wednesday morning the yellow metal's price was in a retreat just below the 1,290 mark, where the commodity price has been since the higher opening of Monday's trading session. During the second half of Tuesday's trading the bullion's surge was suddenly stopped by a market participant selling around 20,000 futures contracts. That forced the metal to retreat and find support in the 61.80% Fibonacci retracement level, which is located at the 1,278.73 level. It is most likely that this level will continue to provide support to the metal, as it is still expected that the bullion will reach the 1,300 mark.
Daily chart
It can be observed on the hourly chart, how the selling of the futures created a large red candle on the hourly chart just after 13:00 GMT. However, afterwards the bullion recovered and once more traded above 1,290 level. Although, after reaching another high level the yellow metal's price began a decline which lasted into the early hours of Wednesday's trading session. During that decline the commodity price fell below the support provided by a combination of 20, 55 and 100-hour SMAs near the 1,287 level. That means that there are no hourly support levels until the 61.80% Fibonacci retracement level.Hourly chart
Read More: Technical Analysis
Markets remain neutral
Traders are bearish on the metal, as 55% of open positions are short. However, 64% of trader set up orders are to buy the bullion.
OANDA Gold traders are neutral regarding the metal, as open positions are 50.84% long on Wednesday, compared to 52.23% previously. Meanwhile, traders of SAXO bank remain neutral, as 51.85% of open positions are long, compared to 50.10% short positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of Gold being above 1,300 in July
© Dukascopy Bank SATraders who were asked regarding their longer-term views on gold between March 19 and April 19 expect, on average, to see the metal near 1,300 in July. Generally, 52% (-1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 36% (+1%) of those surveyed reckon the currencies will trade in the range between 1,100 and 1,300 over the next three months.