- Opened positions on Gold remain positive with a confident majority of bullish trades (66% bullish / 34% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,215
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,201
- Upcoming events on February 21-23: Germany IFO Business Climate (Feb), US Existing Home Sales (Jan), Bank of Japan Monetary Policy Meeting Minutes
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Gold is trading in a tight range as investors were awaiting an outcome of a crucial Eurogroup meeting today. The precious metal was set for its fourth weekly decline in a row as a last-minute agreement concerning Greek proposal was expected, despite the fact that Germany rejected Greece's initiative of a six-month extension to its Euro zone loan agreement. Downside pressure also came from the US Dollar, which strengthened versus other major currencies following better than expected unemployment claims data.
Meanwhile, the number of Americans who applied for unemployment benefits in the week ended February 13 fell more than expected, fresh evidence the US labour market is improving. Initial claims for unemployment benefits decreased by 21,000 to a seasonally adjusted 283,000, the Labor Department said on Thursday, while the prior week's data remained unrevised.
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Political news seem to have most impact on Gold on Monday
Despite a number of important fundamental data releases in the very beginning of the next working week, the bullion is still likely to be driven by political news, especially from Europe. While the Eurogroup is going to discuss a new Greece's debt deal already on Friday, the result of negotiations is going to be transferred to the next week in terms of the long-term effect on both equity and commodity markets.Read More: Fundamental Analysis
XAU/USD develops inside bearish channel on daily chart
On January 22, the level at 1,300 which acted as a strong supply for Gold forced the yellow metal to resume declining. Moreover, the bullion succeeded in consolidating below 1,250 during the second week of February, following a day of considerable decline in price on February 6. Taking into account strength of US fundamental factors and potential positive effects from the expanded asset purchases programme in the Eurozone, the long-term outlook for Gold is remaining fairly bearish. Even though some medium-term bullishness can be created by a major level at 1,200, the precious metal is likely to develop below this level in course of March. Moreover, in case of consolidation below the 2013 low at 1,180, a drop down to 2014 low at 1,130 will be broadly expected to take place toward the end of April.Daily chart
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XAU/USD's bulls attempted to push the bullion above the weekly S1 / 100-day SMA resistance area on Thursday. At the same time, even uplifted demand for the precious metal due to Greek deal's uncertainty failed to fix the price above 1,215. Therefore, Gold returned back to trade around 1,210 at the end of the trading day. For now it seems that there will be no clear price trend in any direction, as the bullion is currently range bound between two strong technical areas at 1,200 and 1,215, respectively. Therefore, outlook for the near term tends to stay neutral.
Hourly chart
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SWFX opened positions stay on positive side
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jan 20 and Feb 20 expect, on average, to see Gold trading around 1,260 by the end of May. At the same time, 55% of them still believe the bullion will be strongly above 1,250 mark in three months, while 29% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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