- Opened positions on Gold remain strongly positive (72% bullish / 28% bearish)
- The closest resistance for the yellow metal is currently located at 1,211
- At the same time, the closest support for the bullion is placed at 1,198
- Upcoming events on April 23: Germany Gfk Consumer Confidence Survey (May) and Manufacturing/Services PMI (Apr), Euro zone Manufacturing/Services PMI (Apr), US Manufacturing PMI (Apr) and New Home Sales (Mar), Switzerland Trade Balance (Mar), UK Retail Sales and Public Sector Net Borrowing (Mar), China HSBC Manufacturing PMI (Apr)
Gold rebounded on Wednesday to trade above $1,200 an ounce, after dropping sharply through the key level in the last two trading sessions, with investors keeping a close eye on the Greek debt crisis and its effect on the currency markets. Traders were also focused their attention on physical demand in top consumer India, which is said to be strong during the Akshaya Tritiya festival, considered one of the most favourable days to purchase gold. Supply of the precious metal into India more than doubled in the run-up to the festival to 125 tonnes from 60 tonnes a year before as traders expected sturdy demand.
Japan's exports outperformed imports in March for the first time in almost three years, according to the Finance Ministry's data. Japan's overall exports soared 8.5% year-on-year, while imports plunged 14.5%, leading to a trade surplus of 229.3 billion yen, compared with the median forecast of 44.6 billion yen. Nevertheless, it is expected that the trade balance will return to deficit in April and be negative for the rest of the year.
PMI data to be in focus on Thursday
Thursday will contribute the largest share of fundamental statistics this week, which turns to be unexpectedly weak on economic data. Several countries around the world are publishing the PMI activity indicators for production and services industries. In the meantime, markets are also closely looking at UK public sector net borrowing data, which is important ahead of the upcoming general election on May 7. In case data comes below 8.4 billion pounds for March, the UK government will achieve its 2014-15 financial year borrowing goal.XAU/USD develops inside bearish wedge pattern on daily chart
Since the second quarter of 2013, the bullion has been developing inside the falling wedge pattern, meaning that trading range is decreasing as time goes on. In March 2014, however, the yellow metal resumed gaining value, even without touching the lower trend-line, at that time located around 1,150. Towards the end of June the bullion is likely to develop in the direction of the upper boundary of this pattern just below 1,260 where bears are forecasted to overtake a lead and drive the metal back to the south. However, the metal can also be stopped by the 200-day SMA around 1,220. The overall negative trend for Gold seems inevitable in the long-term future, while at the end of this year the precious metal is likely to consolidate around 1,150, in case the present trend persists.Daily chart
Yesterday the bullion rebounded back above 1,200 round level and continued to ignore presence of technical levels' zone at 1,198 (weekly PP, 20 and 55-day SMAs). The medium-term outlook therefore is becoming more unclear, while markets are waiting for more pronounced price development. Weekly and monthly technical indicators are pointing to the south; however, for the bearish scenario to be affirmed, the precious metal should fall down as low as 1,183 (monthly PP).
Hourly chart
SWFX opened positions on Gold remain strongly positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened positions stays at 64.16% at the moment, and Gold's sentiment there is currently the fourth most positive among all major currency pairs. Saxo Bank market participants, in turn, are also confident with respect to the precious metal, as there are 59% of bullish positions registered by 5:30am GMT on April 22.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 22 and Apr 22 expect, on average, to see Gold trading just below 1,250 by the end of July. At the same time, 53% of them still believe the bullion will be strongly above this mark in three months, while 33% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.