- Opened positions on Gold remain positive with a slight majority of bullish trades (53% bullish / 47% bearish)
- The closest resistance for the yellow metal it currently located at 1,215
- At the same time, the closest support for the bullion is placed at 1,207
- Upcoming events on March 4: Japan, China, UK, Spain, Italy, France, Germany, Euro zone and US Services PMI (Feb), US ADP Employment Change (Feb) and ISM Non-Manufacturing PMI (Feb), Australia GDP (Q4), Bank of Canada Interest Rate Decision and Rate Statement
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Gold declined for a second session in a row on Tuesday, moving further away from the highest level in two weeks as US Dollar traded near an 11-year high versus a basket of currencies amid growing expectations of an interest rate hike by the Fed. The Dollar's strength, which makes Greenback-denominated assets such as gold more expensive for investors holding other currencies, came despite soft US fundamentals including falling inflation, weak consumer spending and manufacturing activity.
Fed's preferred gauge of US consumer prices dropped in January partly due to lower oil prices, undershooting the central bank's goal of 2% annual inflation for the 33rd straight month. The price index for personal consumption expenditures climbed 0.2% in January from the previous year, following the annual growth of 0.8% in December, the Commerce Department reported.
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Bank of Canada to make interest rate decision on Wednesday
On March 4, the Bank of Canada will make an announcement about the interest rate decision. Still, rates are expected to stay unchanged at 0.75% level. Besides that, very important fundamental data will include the gross domestic product statistics in Australia, while the country's economy probably added 0.7% in three months through Dec 31 on a quarterly basis and 2.6% year-on-year.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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On Monday, two simple moving averages (20 and 100-day) came together in order to push the precious metal considerably to the downside. They succeeded in achieving this goal as Gold dropped even below the weekly pivot point to close the trading session at 1,206. Moreover, a decline continued on Tuesday and the metal fell down to weekly S1 at 1,195. This support, however, is pushing the bullion back above the round mark of 1,200. Daily technical indicators remain bearish at the moment; therefore, a present rebound is likely to be short-lived.
Hourly chart
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SWFX opened positions deteriorate, but stay on positive side
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 71% at the moment, up six percentage points from Monday. As a result, Gold's sentiment is currently remaining the second most positive among major currency pairs at OANDA. In addition, SaxoGroup market participants are also optimistic with respect to the yellow metal, as there are 64% of bullish positions registered by 7:00 GMT today, no change from yesterday.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 3 and Mar 3 expect, on average, to see Gold trading just below 1,250 by the end of June. At the same time, 51% of them still believe the bullion will be strongly above this mark in three months, while 28% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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