- Opened positions for Gold remain positive with a confident majority of bullish trades (74% bullish / 26% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,290
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,283
- Upcoming events on January 29: France Consumer Spending (Dec), Spain Retail Sales (Dec), Germany CPI (Jan), Unemployment Change and Unemployment Rate (Jan), Eurozone M3 Money Supply (Dec) and Consumer Confidence (Jan), US Unemployment Claims (Jan 25) and Pending Home Sales (Dec), UK Nationwide HPI (Jan), Japan Household Spending (Dec), National CPI (Dec), Unemployment Rate (Dec) and Industrial Production (Dec)
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Gold remains well supported as investors are awaiting comments from the Fed to find out whether a faltering global economy may sap the central bank's readiness to lift interest rates this year. The FOMC is due to release its two-day meeting statement later today, with any dovish bias potentially supporting a non-interest bearing asset such as bullion. With the world's number one economy heading for its first interest rate hike in nearly a decade, the yellow metal prices are expected to decline for a third consecutive year in 2015.
Demand for big-ticked manufactured goods unexpectedly plunged in December, a sign US businesses are cautious to spend even in light of the strong economic recovery. Durable goods orders fell a seasonally adjusted 3.4% in December from the previous month, against economists' expectations for a 0.6% gain, while core capex, which excludes defence and transportation orders, dropped 0.6% in the reported month.
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More fundamental data to come from around the world after today's FOMC
While the market is predicted to stay rather volatile already in course of Wednesday amid the FOMC statement on interest rates, the next working day tomorrow will add to market movements amid a big bunch of statistical data from around the globe. Countries include Germany, France, Spain, US, UK and Japan. As a consequence, any turbulence of awaited indicators may force investors buy more precious metal as a safe-haven asset. The same, however, may also happen in the opposite direction for gold in case of positive numbers.Read More: Fundamental Analysis
XAU/USD keeps medium-term bullish momentum
The XAU/USD cross has breached the most important resistance line on January 3, which is represented by the long-term downtrend at $1,218. Consequently, it started to develop above this level to hit $1,300 mark already on January 21. At the moment, it seems unlikely for gold to be able to return back below $1,200 in the foreseeable future. Moreover, if the bullion consolidates well above $1,250, then we may see metal's further increase in the medium-term. Nevertheless, the long-term outlook for the yellow metal tends to remain negative, mostly reflecting strength of US fundamental factors and gradual recovery in Europe. Therefore, in towards the end of Q1 2015 gold is still suggested to lose value.Daily chart
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On Tuesday, gold made an attempt to rebound considerably after losses that occurred back two days ago. Following a successful breach of the monthly R2, the yellow metal decided to keep growing as it tried to push through the 61.8% Fibo / weekly PP at $1,290. At the same time, this resistance held XAU/USD's bulls from going further to the upside. Nevertheless, it seems that the metal will try to advance above this level for the second time today. In case of success, we may observe the gold climbing up to 2011 low at $1,307 in the near term.
Hourly chart
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Read More: Technical Analysis
Bullish majority on Gold extends further
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 28 and Jan 28 expect, on average, to see Gold trading around 1,300 by the end of April. At the same time, 52% of them believe the bullion will be strongly above this mark in three months, while 35% of traders surveyed forecast the bullion to trade in the range between 1,150 and 1,300.
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