- Opened positions on Gold remain positive with a slight majority of bullish trades (54% bullish / 46% bearish)
- The closest resistance for the yellow metal is currently located at 1,207
- At the same time, the closest support for the bullion is placed at 1,195
- Upcoming events on March 7-9: Germany Trade Balance (Jan), China Trade Balance (Feb), Japan GDP (Q4), Euro group meeting, Switzerland Retail Sales (Jan)
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Gold traded below $1,200 an ounce on Friday and was set for a fifth weekly drop, with the Greenback near 11-year peak amid expectations of robust US labour market data and an interest rate hike. Investors are awaiting the US non-farm payrolls data later today to assess the resilience of the world's number one economy and how that will impact the timing of rate hike by the Fed. Today's report may show employers added 235,000 workers in February, while the unemployment rate is expected to drop to 5.6%, matching a more than six-year low.
The number of Americans filing new claims for unemployment benefits rose in the week ended February 28, breaking above 300,000 threshold. Initial jobless claims across the US increased to a seasonally adjusted 320,000 in the measured period, the Department of Labor said, following the last week's figure of 313,000.
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China announces trade data on Sunday, Japan to revise GDP numbers
During the weekend and on Monday, there are several important indicators that are likely to have impact on the price of Gold when trading resumes in the beginning of a new working week. Among those factors, Japan is going to revise its GDP growth for the last quarter of 2014, while Chinese statistical authorities are going to announce the trade balance data on Sunday. It is worth pointing out that Chinese export is expected to have gained 14.2% in February, but the surplus of trade is forecasted to narrow.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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For a fourth consecutive day, a daily change in price of Gold does not exceed two important technical levels which are keeping the bullion in a narrow trading range. Among them, the weekly PP is located at 1,207 and weekly S1 is placed around 1,195. Yesterday, the metal managed to close below the 1,200 round level; however, bears lacked momentum to proceed with crossing the nearest support. Meanwhile, technical studies on a weekly time-frame see Gold gaining value; therefore, a drop significantly below 1,190-1,195 area is unlikely at the moment.
Hourly chart
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SWFX opened positions stay slightly positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 73.11% at the moment, up more than four percentage points in course of past 24 hours. As a result, Gold's sentiment is currently 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 68% of bullish positions registered by 6:45 GMT today, up seven percentage points from Thursday.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 6 and Mar 6 expect, on average, to see Gold trading at 1,250 by the end of June. At the same time, 53% of them still believe the bullion will be strongly above this 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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