- Opened positions for Gold are strongly positive (73% bullish / 27% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,200
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,177
- Upcoming events: French Consumer Spending, UK Final GDP, Canadian GDP, US Final GDP, Core Durable Goods Orders and New Home Sales
Holdings in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, climbed 0.4% on December 19 to a one-week high. Last week, concluding the FOMC's two-day meeting, Fed Chairwoman Janet Yellen said that the US central bank plans to hike interest rates next year, but it would take a patient approach in deciding on a timing of the first rate hike, which would not take place any earlier than late April. The FOMC statement also showed that the overwhelming majority of policy makers expect the Fed to raise the federal funds rate by 0.75-1.75 percentage points in 2015. Higher interest rates would bolster the greenback and hurt non-interest-bearing gold, which was supported by central bank liquidity injections and a low interest rate environment.
In the meantime, UK public finances improved considerably in November, as the central government borrowed less, while more tax receipts were received. The Office for National Statistics said public sector net borrowing, which strips out state-controlled banks, totaled 14.1 billion pounds in November, down 10% from the previous year. The improvement was driven largely by less central government borrowing as tax receipts in November advanced by 5.5%, compared with the last year's data.
Gold to be influenced by GDP statistics on Tuesday
Among all fundamental news that is going to be released on the second day of this week, traders should pay the most attention to economic growth data in several major economies. US and UK statistical offices will reveal the final numbers for GDP growth in the third quarter of this year. They will be followed by growth data in Canada for October. Besides that, UK current account deficit is projected to decrease, while US core durable goods orders are expected to jump 1.1% in November.XAU/USD returns back below down-trend
Yesterday, the XAU/USD cross traded almost completely unchanged, compared to previous two days, as Gold's price remained well-supported by the weekly S1 at $1,193 and limited by the monthly R1 at $1,205 from the upside. Daily technical indicators are still giving neutral signals, meaning that we can expect no major changes during the next 24 hours, but in the medium-term XAU/USD pair is likely to lose value.Daily chart
Last Friday, the bullion fell slightly to trade around $1,195 per ounce at the end of trading session, even though the overall picture for the metal remained neutral. Gold is still unable to climb higher than the monthly R1 at $1,205, which is reinforced by a number of other strong resistance levels. According to technical indicators, in the weekly perspective we should see bears taking the lead and the pair losing value. The next support line is located as far as at $1,177 (weekly S1).
Hourly chart
Long opened positions decreased slightly
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Nov 22 and Dec 22 expect, on average, to see Gold trading just above 1,200 by the mid-March. At the same time, 47% of them believe the bullion will be above this mark in three months, while one third of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.