- Opened positions on Gold remain positive (66% bullish / 34% bearish)
- The closest resistance for the yellow metal is currently located at 1,209
- At the same time, the closest support for the bullion is placed at 1,198
- Upcoming events on March 28-30: Euro zone Consumer Confidence (Mar), Germany CPI (Mar), US Personal Spending (Feb) and Pending Home Sales (Feb), UK Gfk Consumer Confidence (Mar) and Mortgage Approvals (Feb)
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The total number of claims for unemployment benefits in the United States dropped more than expected for the previous week ended March 21, as brightening economic outlook for the world's biggest economy is having a positive impact on job creation and decreases the number of lay-offs. In total, 282,000 Americans filed applications for jobless benefits during the weekly period, down from 291,000 a week before.
While labour market is registering positive changes for the past couple of years, with more than three million new jobs created, consumer prices in the US remain subdued. Negative impetus was also provided by oil prices in the second part of 2014. Fed's officials have stated last Wednesday that they are going to monitor situation with both labour market and inflation, before giving any guidance for an increase of the benchmark interest rate.
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UK, Euro zone consumer confidence levels seen increasing
On Monday, both the single currency area and the UK are going to publish important data on consumer sentiment, with both of them expected to improve this month. From another side of the Atlantic Ocean, however, US personal spending and home sales will be announced for the month of February. Taking into account the medium importance level for all these data releases, market may expect some impact on Gold to take place in the beginning of new week.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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Yesterday, the yellow metal tried to pierce through two major supply zones and register considerable daily gains. However, the bullion was stopped by these levels at 1,209 (100-day SMA) and 1,216 (weekly R2), respectively. However, it did not prevent Gold from consolidating above the Jan-Mar down-trend line and weekly R1 at 1,205 by the end of day. It is still likely to make the second attempt to develop further to the north, while in case of failure a sell-off will be almost inevitable with the short-term target at 1,190-1,195.
Hourly chart
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SWFX opened positions remain positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 68.98% at the moment, a gain of just below three percentage points from yesterday. Gold's sentiment is currently the second most positive among major currency pairs at OANDA. In addition, SaxoGroup market participants are also positive with respect to the yellow metal, as there are 67% (+8%) of bullish positions registered by 6:45 GMT on March 27.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 27 and Mar 27 expect, on average, to see Gold trading just at 1,200 by the end of June. At the same time, 52% of them still believe the bullion will be strongly above this mark in three months, while 29% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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