- SWFX traders are 51% bearish
- 67% of pending orders are to buy the metal
- The bullion opened at 1,268.04
- Upcoming Events: ECB President Draghi's Speech
As it was long expected, the yellow metal has reached the 1,270 mark. However, a bounce off has occurred. The commodity price is most likely going to decline until it regains its strength and continues the surge. The main question is how low it will decline before the surge continues.
The US economy expanded at a stronger-than-initially expected pace in the March quarter; however, an economic slowdown remained on the table in the second quarter. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualized pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months.
Mario Draghi Speaks at 13:00 GMT
On Monday all attention is concentrated on one event. At 13:00 GMT the President of the ECB Mario Draghi is set to give a speech. Namely, he is due to testify about the economy and monetary developments before the Economic and Monetary Affairs Committee, in Brussels.
Gold reaches near 1,270 level
The yellow metal started the week below the 1,270 mark with a decline. The reason for the decline was the fact that the commodity price already reached and has bounced off the resistance put up by the monthly PP, which is located at the 1,269.77 level. In general, a continuation of the surge in the future is still expected. However, before that the bullion is most likely going to retreat until it finds support in the weekly PP at the 1,261.80 level.
Daily chart
On a smaller timeframe chart it can be observed that the commodity price might not even retreat down to the weekly PP during today's trading session. The bullion has found enough support in the lower hourly Bollinger band, which has stopped the decline of the price. It is possible that it will also be sufficient to push for a breaking of the monthly PP after a few attempts.
Hourly chart
Bullish sentiment creeps in
SWFX traders remain almost neutral, as 51% of open positions are long. Meanwhile, 67% of pending commands are set to buy the metal.
OANDA Gold traders remain bullish, as open positions are 67.09% long on Monday, compared to 63.59% previously. Meanwhile, traders of SAXO bank are moving to the bullish side, as 55.79% of open positions are long, compared to 50.26% positions on Friday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being near 1,350 in late August
Traders who were asked regarding their longer-term views on gold between April 29 and May 29 expect, on average, to see the metal just below 1,350 by September. Generally, 46% (-2%) of participants believe the price will be above 1,350 in ninety days. Meanwhile, 38% (+3%) of those surveyed reckon the metal will trade in the range between 1,200 and 1,350 over the next three months.