- Opened positions for Gold remain positive with a confident majority of bullish trades (75% bullish / 25% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,290
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,278
- Upcoming events on February 3: Italy CPI (Jan), Eurozone PPI (Dec), France 10-y Bond Auction, US Factory Orders (Dec), Australia Trade Balance (Dec), Reserve Bank of Australia Interest Rate Decision, Switzerland Trade Balance (Dec), UK Construction PMI (Jan), New Zealand Unemployment Rate (Q4)
© Dukascopy Bank SA
Gold traded just slightly below $1,280 an ounce on Monday following the biggest monthly advance in three years in the previous trading session as the US, the world's biggest economy, posted weaker than expected GDP growth in the final quarter of 2014. The US economic output rose at a 2.6% annual pace in the December quarter, following the solid 5.0% growth in the previous three-month period. The yellow metal is seen keeping its safe-haven status going forward amid renewed worries over the world's economy, as data also showed a contraction in China's manufacturing activity for the first time since September 2012.
The world's number once economy slowed its growth pace in the final quarter of the year, even despite the solid hiring and falling gasoline prices. The main drag came from exports as US top trading partners have been struggling to grow recently. The Commerce Department reported that the US gross domestic product, the broadest measure of goods and services produced across the economy, rose at a 2.6% annual rate in the fourth quarter.
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Reserve Bank of Australia to announce rate decision tomorrow
Among important fundamental news that is going to be released on February 3 and that may have influence on performance of Gold, the majority of them will unusually come from outside Europe and US. The most awaited event is assumed to be the decision of Australia's central bank. Taking into account recent unexpected decisions of different regulators around the world, the RBA's interest rate decision will be closely watched by investors around the world.Read More: Fundamental Analysis
XAU/USD keeps medium-term bullish momentum
The XAU/USD cross has breached the most important resistance line on January 3, which is represented by the long-term downtrend at $1,218. Consequently, it started to develop above this level to hit $1,300 mark already on January 21. At the moment, it seems unlikely for Gold to be able to return back below $1,200 in the foreseeable future. Moreover, if the bullion manages to remain above $1,250, then we may see metal's further increase in the medium-term. Nevertheless, the long-term outlook for the yellow metal tends to remain negative, mostly reflecting strength of US fundamental factors and gradual recovery in Europe. Therefore, in towards the end of Q1 2015 gold is still suggested to lose value.Daily chart
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On Friday, Gold has fully erased all considerable losses that occurred one day before. The XAU/USD cross surged more than $20 per ounce and closed around $1,283 on the last day of previous week. At the moment the bullion's bulls are getting support from the weekly pivot point five US Dollars below from the present spot price. This line, in turn, is also followed by the long-term downtrend at $1,270. Fuelled by bullish weekly technical indicators, sentiment towards the yellow metal remains positive for the short-term.
Hourly chart
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SWFX opened trades on Gold grow to 75%
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jan 2 and Feb 2 expect, on average, to see Gold trading just above 1,300 by the end of May. At the same time, 54% of them believe the bullion will be strongly above this mark in three months, while 33% of traders surveyed forecast the bullion to trade in the range between 1,150 and 1,300.
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