- SWFX traders are 51% bearish
- 73% of pending commands are to buy the metal
- The bullion opened at 1,239.40
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Upcoming Events: US Unemployment Claims; US preliminary Nonfarm Productivity; US Preliminary Unit Labor Costs; US Trade Balance, US Factory Orders
The bullion has reached the expected target of a long term pattern's lower trend line sooner than expected. However, the future direction of the metal seems unclear. As at the moment the metal's price is at a critical point, it can either begin a medium term surge or continue the decline.
As markets expected, the US Federal Reserve left its monetary policy unchanged at its meeting on Thursday. However, policymakers signalled that "the path of gradual tightening" remained in play despite an economic slowdown registered in the March quarter. Although the Fed did not provide any clues on the timing of the next interest rate hike. Nevertheless, according to market forecasts, the next hike will likely appear in June. Solid inflation growth and the strong labour market pleased policymakers and offset sluggish economic growth. The next Fed meeting will take place on June 13-14 in Washington.
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Upcoming events: Various US data
Thursday is set to be full of various minor impact US data releases in the middle of the day. First data set from the US will be published at 12:30 GMT, as the US Unemployment Claims, Preliminary Nonfarm Productivity, Preliminary Unit Labor Costs and the US Trade Balance will be out at that time. Afterwards, at 14:00 GMT the US Factory Orders data will be out.
Read More: Fundamental Analysis
Gold reaches long term trend line
As the FOMC published their statement, the yellow metal's price declined and passed two significant support clusters. The fall stopped exactly at the lower trend line of the long term ascending channel pattern. Initially this move was expected to occur later. On Thursday morning the commodity price was squeezed in between the trend line and a resistance cluster just above the 1,240 level. However, it is most likely that the resistance cluster will be broken and the metal will begin to approach the 1,250 mark.
Daily chart
The hourly chart clearly shows that all of the hourly simple moving averages, which could provide support to the lower trend line of the long term channel, are far above it. The trend line is all alone. Moreover, the lower Bollinger band on the hourly chart is below the commodity price. Due to that fact a passing of the trend line might be possible. In such case a fall, as low as the 1,220 mark might be possible.Hourly chart
Read More: Technical Analysis
Bulls show dominance
SWFX market sentiment is almost neutral, as 51% of open positions are short. However, 73% of trader set up orders are to buy the metal.
OANDA Gold traders have increased their bullish position amount, as open positions are 64.63% long on Thursday, compared to 59.81% previously. Meanwhile, traders of SAXO bank are also largely bullish, as 72.94% of open positions are long, compared to 64.46% positions on Wednesday.
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 4 and May 4 expect, on average, to see the metal near 1,350 in early August. Generally, 44% of participants believe the price will be above 1,350 in ninety days. Alongside, 43% of those surveyed reckon the metal will trade in the range between 1,200 and 1,350 over the next three months.