- Opened positions for Gold are positive (72% bullish / 28% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,210
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,192
- Upcoming events on January 6: Spanish Services PMI, Italian Services PMI, Eurozone Services PMI, US ISM Non-Manufacturing PMI and Factory Orders, UK Services PMI and Halifax HPI
© Dukascopy Bank SA
Gold price is supported by strong demand from China, which offset a firm greenback. China's buying has risen in recent weeks ahead of the Lunar New Year, with demand is likely to remain strong until the holidays on 19-20 February. On top of that, investors watch closely Greece's political crisis, which might potentially lead to the country's exit from the Euro zone. Greek Prime Minister Antonis Samaras said on 2 January that victory for the main opposition Syriza party in the 25 January elections would cause default and Greece's exit from the currency bloc.
Meanwhile, activity in the US factories lost steam in December, but manufacturers were optimistic entering 2015, believing that the slowdown in growth would be temporary. The Institute of Supply Management's manufacturing PMI fell to 55.5 in December, down from 58.7 registered in the preceding month, indicating deterioration in activity but continuing to show a strong growth.
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Services PMI data to have most impact on Gold tomorrow
Tuesday will be marked by a large number of countries, which are going to release statistical indicators to show activity in service sectors of their economies. As the tertiary industry accounts for more than 70% of GDP in the majority of developed countries, the overall influence on the yellow metal is likely to be strong. First PMI indicators will be published by different European countries, including Spain, Italy and the United Kingdom. Following that, the US ISM Non-Manufacturing PMI and factory orders will be announced in the same time period.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 recovered in price during the first trading day of 2015 on January 2. At first the cross tried to overcome a significant supply zone around $1,190, but failed to do that and closed just below the monthly PP at $1,188. However, in the early morning of Monday the bullion made the second and more successful attempt to cross the resistance area. If it manages to consolidate above it, a rise towards weekly R1 at $1,210 is possible in the short-term. Otherwise, Gold will plunge back to 2013 low.
Hourly chart
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Read More: Technical Analysis
Long opened positions rise to reach 72%
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 5 and Jan 5 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