- Opened positions for Gold remain strongly positive (73% bullish / 29% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,233
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,210
- Upcoming events on January 16: Germany CPI (Dec), Eurozone Final CPI (Dec), Italy Current Account (Nov), US CPI (Dec), University of Michigan Consumer Confidence (Jan), Industrial Production (Dec) and Philadelphia Fed Manufacturing Index (Jan), Switzerland Retail Sales (Nov)
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Bullion remained relatively steady on Thursday, as Asian stocks rebounded, while a recent sell-off in commodities continues to weigh on the precious metal, which stayed below its highest level in 12 weeks. Gold fell along with copper that dived to the lowest in more than five years a day earlier after the World Bank downgraded its global growth outlook. However, it is expected that demand for gold will bounce back in 2015 as consumption of bullion in Asia rises and investors return to exchange-traded assets backed by the precious metal, HSBC said. Global demand is seen rising 15% to 4,127 metric tons this year.
US retail sales unexpectedly fell in the busiest month of the year, as consumers pulled back on spending at retailers in December. According to the Commerce Department, sales at US retailers dropped 0.9%, the biggest decline since January, following a downwardly revised 0.4% growth in the preceding month and compared with economists' forecast for a 0.2% increase.
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US CPI, consumer sentiment set to drive Gold on Friday
There are a number of important fundamental factors which are supposed to have influence on the yellow metal on Friday due to high level of importance. Speaking about the most influential ones, market participants will be waiting for American data on consumer price index in December which is estimated to decline down to 0.7% on the annual basis amid falling oil prices. In addition to that, the University of Michigan will release its monthly consumer confidence index for January. This one, however, is projected to remain on strongly positive levels.Read More: Fundamental Analysis
XAU/USD keeps medium-term bullish momentum
The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend at $1,218 and started to develop above this line again on January 9. At the moment it is hard to say whether Gold is able to return back below this level. If the bullion consolidates above it, then we may see metal's further increase in the medium-term, with the goal at 50% Fibonacci retracement at $1,260. Nevertheless, the long-term outlook for the yellow metal tends to remain negative, mostly reflecting strength of US fundamental factors. Therefore, in course of first months of 2015 Gold is still suggested to lose value, which may follow the present rebound soon.Daily chart
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For the second consecutive day Gold is showing almost the same tendency in terms of overall movements of the price. Volatility has also stayed rather high, as maximum trading levels were reaching $1,244, above the weekly R1. Despite that, XAU/USD's daily change was small as it closed slightly down and just below the 38.2% Fibonacci retracement at $1,227. A considerable change took place with technical indicators, as daily ones are now pointing strongly to the upside by giving completely no signals to sell Gold in the near term. Monthly studies, however, are still pointing to the south.
Hourly chart
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Bullish majority on Gold stays above 70%
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 15 and Jan 15 expect, on average, to see Gold trading around 1,220 by the end of April. At the same time, 44% of them believe the bullion will be above 1,250 in three months, while 25% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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