Gold returns below 23.6% Fibo

Source: Dukascopy Bank SA
  • Opened positions for Gold are positive (67% bullish / 33% bearish)
  • It is possible that Gold will grow in price, with the closest resistance for it located at 1,192
  • At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,180
  • Upcoming events: China Manufacturing PMI, US Unemployment Claims, Pending Homes Sales and Crude Oil Inventories

© Dukascopy Bank SA
On the first day of the new week, Gold was among those commodities to decrease in value, while the only performer to the upside used to be natural gas, which became 5.47% more expensive, judging from market prices. Corn and the yellow metal lost the smallest value, as they were down 0.48% and 1.06%, respectively. The most considerable plunge was registered by oil for the second consecutive day. Brent and Crude types of black gold crashed 2.64% and 2.05%, respectively. Silver followed by sinking as much as 1.63%.

The US Dollar hovered around the highest level in nine years versus a basket of major currencies, sapping gold's lure as a hedge. The Greenback stayed close to the 29-month peak against the single currency as Greek Prime Minister Antonis Samaras called snap general elections following unsuccessful attempt to elect a president. On top of that, shares rose in major markets on Monday, hurting the yellow metal, while crude oil prices dropped following a short-lived rebound.

Concerning the core fundamental part, US durable goods orders unexpectedly slumped in November, largely owing to a weak demand for military and defense goods. The Commerce Department said that orders for long-lasting goods declined 0.7% last month, the third drop in the past four months. Much of the decrease was attributed to a sharp 8.1% fall in demand for defense-related goods. Excluding volatile transportation equipment, bookings slid 0.4%.

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US and China statistics to drive Gold during New Year's Eve

Even though trading volumes are at very low levels during Christmas and New Year holidays, some statistics is still scheduled to be published and is likely to have influence on the price of Gold. Tomorrow, the most important data is considered to be the weekly jobless claims, which will be followed by pending home sales for November and crude oil inventories in the US for the week ended December 28. Alongside, the Chicago PMI will show activity in different industries of this city's region, while in the evening of December 31 the Chinese Federation of Logistics and Purchasing will release a very important manufacturing PMI for the country in December.


XAU/USD returns back below down-trend

The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend and developed above this level for the past week. However, on December 15 Gold returned back, mostly amid fundamental factors. At the moment the most considerable resistance is represented by this long-term downtrend line, which is currently located at $1,205 and strengthened by the monthly and weekly R1.

Daily chart
© Dukascopy Bank SA

Gold undertook a correction period during the first day of New Year's week. XAU/USD was unable to consolidate above the 23.6% Fibo retracement, which is also reinforced by the 20-day SMA and weekly pivot point around $1,192. As a result, the cross fell below this important line. At the same time, a confident support was provided by the 2013 low and weekly S1 $1,180. Despite that, judging from technical indicators, Gold is likely to decline both in short and medium-term, and we tend to believe them.

Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis

Long opened positions decreased further to 67%

Distribution between opened positions for buying and selling Gold is still remaining strongly positive and in favor of former, as bulls have a stable majority with 67% of all trades (70% on Monday). However, it is the lowest level in around two weeks. On the other hand, OANDA traders returned back to have the opened positions' distribution seen back on Friday of the previous week. At the moment there are 61% (56% yesterday) and 39% (44%) of long and short positions on Gold, respectively. SaxoGroup bullish market participants, in turn, are down three percentage points, as now they are holding 63% of all long positions.













Spreads (avg,pip) / Trading volume / Volatility


Traders, who were asked regarding their longer-term views on XAU/USD between Nov 30 and Dec 30 expect, on average, to see Gold trading around 1,200 by the mid-March. At the same time, 48% of them believe the bullion will be above this mark in three months, while slightly less than one third of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA

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