- Opened positions on Gold remain positive with a confident majority of bullish trades (65% bullish / 35% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,211
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,198
- Upcoming events on February 24: Germany Final GDP (Q4), Eurozone CPI (Jan), ECB President Draghi's Speech, US Markit Services PMI and Consumer Confidence (Feb), Federal Reserve Chairwoman Janet Yellen's Speech to Congress, Switzerland Employment Level (Q4), Bank of Canada Governor Poloz's Speech
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Growth of business activity in the US manufacturing sector accelerated in February at the fastest pace since November, rebounding from the lowest level in a year in the preceding month. Markit's flash manufacturing PMI climbed to 54.3 in February, compared with the January's final reading of 53.9.
Meanwhile, Euro zone manufacturing is gradually improving, while activity in services sector continues to increase at a solid pace. The flash manufacturing PMI for the Euro bloc climbed to 51.1 in February, up from 51.0 in the preceding month and reaching the highest level in seven months. Activity in the Euro bloc's services sector rose further, with the corresponding index ticking up to 53.9 in the reported month, compared with 52.7 a month earlier.
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ECB, Fed and BoC heads to give speeches on Tuesday
On the second day of this week, the heads of three major central banks around the world are giving their speeches that are considered as events with high importance levels. Along with Mario Draghi of the ECB and Stephen Poloz of the Bank of Canada, most of the attention will still be paid to Janet Yellen, the Fed's Chairwoman. She is going to hold a question-and-answer session in the US Congress and expected to give some forward guidance on a future increase of the main interest rate.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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At the end of last week, the bullion made a second unsuccessful attempt to cross the 1,200 round level. Currently, a strong support is provided by a number of important technical levels, including the monthly S1 and 23.6% Fibonacci retracement. In the short-term, this demand zone is going to provide Gold with some bullishness; therefore, a rebound toward the weekly pivot point at 1,211 is expected. Nevertheless, a move above this resistance is also unlikely to take place. Meanwhile, daily technical studies are still giving signals to sell the yellow metal.
Hourly chart
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Read More: Technical Analysis
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 23 and Feb 23 expect, on average, to see Gold trading around 1,250 by the end of May. At the same time, 53% of them still believe the bullion will be strongly above this mark in three months, while 30% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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