- Opened positions for Gold remain strongly positive (75% bullish / 25% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,220
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,197
- Upcoming events on January 9: German and French Industrial Production, German and French Trade Balance, US Non-Farm Employment Change, Unemployment Rate and Average Hourly Earnings, UK Manufacturing Production and Trade Balance, Canadian Employment Change and Unemployment Rate
Gold managed to stay above $1,200 an ounce, amid strength of the Greenback and positive US economic data, which reduces gold's safe-haven appeal. Meanwhile, the Fed is unlikely to raise interest rates until April, remaining "patient in beginning to normalize the stance of monetary policy", according to the minutes from the latest FOMC meeting. The minutes also indicated that the Fed saw falling energy costs positive for the world's number one economy and the US job market. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.42% to 704.83 tonnes on Wednesday, the lowest level since late 2008. Inflows and outflows of the fund tend to affect gold prices due to the size of its holdings.
US private companies created more jobs than expected in December, adding to signs the job market kept momentum at the end of the year, and bringing annual hiring to 2.5 million for 2014, according to payroll processor ADP. Employers added 241,000 workers, following the 208,000 increase in employment in previous month, beating economists' expectations for a 227,000 rise.
Gold expected to be volatile ahead of Friday data
Being that the last day of this week will bring a lot of important fundamental news, the yellow metal is therefore predicted to stay increasingly volatile and sensitive to any drastic changes in economic indicators. For Gold to change in price significantly, traders may look at US labor market data which includes employment change and the jobless rate for December. High-importance data also includes the UK manufacturing production and Canadian labor statistics, which may become additional drivers for Gold tomorrow.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 $1,225 and strengthened by the 100-day SMA and 38.2% Fibonacci retracement. Therefore, in course of first months of 2015 Gold is suggested to lose value.Daily chart
After major gains for three days in a row, on Wednesday Gold has eventually commenced a correction period from the long-term downtrend line which is currently located at $1,220. As a result, the bullion violated the weekly R1 support line at $1,210. Taking into account constantly bearish technical studies both in short and long-term, we see the metal dropping in value. Moreover, for now there is a high chance of a decrease at least down to $1,192 (23.6% Fibo) which is the closest strong support line at the moment.
Hourly chart
Long opened positions unchanged at 12-day high
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 8 and Jan 8 expect, on average, to see Gold trading around 1,200 by the end of April. At the same time, 53% of them believe the bullion will be above this mark in three months, while 27% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.