The bullion received some support from inflows of 2.4 tones into SPDR Gold Trust, the world's leading gold-backed exchange-traded fund. Despite the first inflow in two weeks, the fund's holdings are remaining firmly near the lowest level in six years, underscoring bearish sentiment in the market. The downtrend in gold price persists, as optimism over the US economy and a strong Dollar continues to dampen bullion's appeal as inflation hedge. The Greenback rose to the highest level in seven years against the Japanese Yen on Wednesday and continued to hold strong versus a basket of major currencies.
Gold has declined in tandem with oil in recent trading sessions amid expectations that weaker crude prices could lower inflationary pressure. The metal is usually seen as a hedge against rising prices. The metal's 60-day volatility is close to 16, the highest since mid-March. Prices advanced 3.6% on December 1, the biggest daily rise since September 2013, after crude soared 4.3%, the most since August 2012.
Impact on Gold to come from central banks on Thursday
As estimated, the most considerable influence on Gold prices will be provided by central banks in Europe, which are due to announce their fresh monetary policy decisions. They will include the European Central Bank and the Bank of England. However, the market expects no surprises from the regulators concerning interest rates or volumes of QE programs. In the United States, unemployment claims are forecasted to fall back down to the four-week average level of 290,000.EUR/USD is trading range bound by filling triangle pattern
The long-term outlook for the EUR/USD remains bearish, as the cross has been moving downwards since the beginning of July. For the time being the pair is trading within the boundaries between 1.24 and 1.25. However, any negative impetus will push the cross down to 2014 lows around 1.2360. From another side the Euro is limited by a long-term down-trend around 1.2540; therefore, the bearish scenario is most suitable for the pair at the moment.Daily chart
Having a look at the short-term chart for the yellow metal, it can be observed that on Tuesday the XAU/USD cross continued hovering slightly above the $1,200 threshold, which is supported by the weekly R1 at $1,192 from the south. At the same time, we predict the bears to succeed in crossing this support level and resume its downward trend towards the 2014 low. However, at first the bearish intentions are likely to be tested by the monthly PP at $1,168.
Hourly chart