- Opened positions on Gold remain strongly positive (73% bullish / 27% bearish)
- The closest resistance for the yellow metal is currently located at 1,203
- At the same time, the closest support for the bullion is placed at 1,197
- Upcoming events on April 17: Euro zone CPI (Mar), US CPI (Mar) and Reuters/Michigan Consumer Sentiment Index (Apr), UK Claimant Count Change (Mar) and Unemployment Rate (3M through Mar), Canada CPI (Mar)
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Gold rose on Thursday on the back of weaker than expected US economic data and Greece debt impasse. US industrial production declined a seasonally adjusted 0.6% in March from the previous month. Meanwhile, Greek officials have little time left to present a revised list of reform measures to Euro zone's working group, which are necessary to unlock a critical stimulus package. It is expected that Greece could deplete its cash reserves next week after the deadline on Monday but ahead of the meeting in Riga.
The Bank of Canada maintained its key interest rate on hold and said effect from an oil-price shock may be waning. The central bank kept the benchmark rate on overnight loans between commercial banks at 0.75% for a second consecutive meeting after an unexpected rate cut in January. The BoC considerably cut its first quarter growth expectations to 0% from 1.5%. Yet, outlook for Q2 and Q3 was revised upwards to 1.8% and 2.8%, respectively.
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Inflation data to come from Canada, US, Euro zone on April 17
Tomorrow, several major economies around the world are publishing statistics on consumer prices in March. They will include Canada, the Euro zone and US, while the latter is also releasing a high-importance consumer sentiment indicator for April calculated by the University of Michigan. In the meantime, tomorrow's data will be added by labour market numbers from the UK, where the jobless rate is forecasted to drop down to 5.6% in three months through March.Read More: Fundamental Analysis
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 which is currently located around 1,100. Therefore, towards the end of April the bullion is likely to approach the upper boundary of this pattern just below 1,280 where bears are forecasted to overtake a lead and drive the metal back to the south. The overall negative trend for Gold seems also 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
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Despite significant growth that Gold experienced on Wednesday, the short-term outlook for it remains fairly negative. It seems that the bullion renewed its bearish tendency on April 6, when it reached the monthly R1 at 1,233. Yesterday's support, however, was provided by weekly S1 and the metal approached 55-day SMA just above 1,200. However, we tend to believe that dense supply area around 1,210 will cap the yellow metal in the near-term, thus a return towards 2013 low will remain in the medium-term perspective.
Hourly chart
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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 62.01% at the moment, and Gold's sentiment there is currently the seventh 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 56% of bullish positions registered by 6:00am GMT on April 16, down five percentage points on a basis of past 24 hours.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 16 and Apr 16 expect, on average, to see Gold trading around 1,250 by the end of July. At the same time, 58% of them believe the bullion will be strongly above this mark in three months, while 27% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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