- Opened positions on Gold remain positive with a confident majority of bullish trades (62% bullish / 38% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,229
- At the same time, the probability of a downside movement exists as well, with the closest support being placed at 1,216
- Upcoming events on February 14-16: New Zealand Retail Sales (Q4), Japan GDP (Q4) and Industrial Production (Dec), UK Rightmove HPI (Feb)
Gold reached its lowest level in five weeks, as the uncertainty over Greece's future dominated the market. Greece's and Euro zone's officials failed to reach an agreement after seven years of talks in Brussels. The negotiation will resume next week. Meanwhile, global demand for gold declined in 2014 as buying fell in two world's biggest gold-consumers, China and India, according to the World Gold Council. Total demand in 2014 was 3,924 tons compared with 4,088 tons the previous year. However, gold demand growth rose into the end of the year, as December-quarter demand was 988 tons, up 6% from the same period the year before.
US retail sales declined more than expected in January, suggesting growth in the world's number one economy lost some traction at the beginning of the year. According to the Commerce Department, retail sales decreased 0.8% in January, while the core measure, which excludes automobiles, dropped 0.9% on month. Despite gasoline prices declining 39.5% since June, consumer spending has been weaker in the past two months.
US Bank Holiday to leave fundamental part silent on Monday
As the Unites States are having a Bank Holiday on Monday of the next week, there is no news estimated to be released in this country. Moreover, European countries will join their North American peer in terms of publishing no fundamentals at all. Therefore, the only market makers will be located mostly in Asia, especially in Japan. The third-biggest global economy will announce its pace of economic growth for Q4 in the night between Sunday and Monday, while this data will be later followed by industrial production numbers for December.XAU/USD forms down-trend after touching 1,307
XAU/USD cross breached the most important resistance on January 3, represented by the long-term downtrend line, which is currently located at 1,201. Consequently, it started to develop above this level to hit the 1,300 mark already on January 21. It, in turn, used to act as a strong supply for Gold in order to resume declining. If the bullion comes under uplifted bearish pressure and manages to consolidate below 1,250 by the mid-February, then we may see the metal's gradual decrease in price back towards 1,200 in the medium-term. Moreover, the long-term outlook for the yellow metal is also remaining negative, mostly reflecting strength of US fundamental factors and QE potential effects in Europe. Therefore, in course of the first quarter the bullion is suggested to lose value.Daily chart
On Thursday, the bullion tried to regain bullish momentum, helped by demand area around 1,215. This support zone was represented by 100-day SMA and weekly S1, and it has finally pushed Gold upwards. However, the precious metal was immediately stopped by the closest resistance in face of 38.2% Fibonacci retracement at 1,229. Moreover, this obstacle is reinforced by 55-day SMA; therefore, a penetration of this level in unlikely in the short-term. Meanwhile, both near and long-term technical studies are now giving signals to sell Gold.
Hourly chart
SWFX opened trades preserve bullish advantage
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jan 13 and Feb 13 expect, on average, to see Gold trading around 1,310 by the end of May. At the same time, 58% of them believe the bullion will be strongly above this mark in three months, while 26% of traders surveyed forecast the bullion to trade in the range between 1,150 and 1,300.