- Opened positions on Gold remain positive (65% bullish / 35% bearish)
- The closest resistance for the yellow metal is currently located at 1,173
- At the same time, the closest support for the bullion is placed at 1,146
- Upcoming events on March 10: France and Italy Industrial Output (Jan), US Wholesale Inventories (Jan), China CPI (Feb), Switzerland Unemployment Rate (Feb), Japan Machine Tool Orders (Feb) and Machinery Orders (Jan)
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Gold traded near the lowest level in three months as the US Dollar rose to an 11-year high following upbeat US jobs data, which fuelled expectations the Fed would soon raise interest rates. Data on Friday showed US employers created more jobs than expected in February, while the unemployment rate fell to 5.5% from 5.7%, marking the lowest level since before the recession. As a result, the Greenback climbed to a fresh 11-year high versus a basket of major currencies on Monday, as unexpectedly robust US jobs report put a mid-year interest rate hike on the table.
A separate report showed January's trade deficit narrowed, helped by a decline in crude oil import prices. The nominal trade shortfall narrowed to $41.8 billion in January, following a revised $45.6 billion gap for December. Exports declined 2.9% to $189.4 billion, while imports plunged 3.9% to $231.2 billion.
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Chinese CPI, Swiss jobless rate to be revealed on Tuesday
The Swiss State Secretariat for Economic Affairs is going to publish the unemployment rate for the country for the month of February tomorrow. The indicator is estimated to remain low around the current mark of 3.1%. Among other fundamentals as potential influencing factors for Gold include the Chinese inflation data for the second month of this year, while analysts see the CPI Index rising marginally to 0.9% on the annual basis.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 1,200 during the first week of March, following a period of considerable losses. 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 the 2014 low around 1,130, the precious metal is likely to develop below this level in course March-May time period. Moreover, in case of consolidation below this mark, a drop down to 2010 low at 1,044 will be broadly expected to take place towards the end of the second quarter of 2015.Daily chart
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Gold has been negatively affected by optimistic statistics from the US on Friday. Strong jobs' growth raises speculations for Fed's rate rise and decreases demand for safe-haven assets such as Gold. Therefore, the metal lost more than $30 before the weekend and closed at the 1,166 level. Moreover, it pierced through two major supports in face of 2013 low and monthly S1. The cross, however, may rebound slightly on Monday, even though a gap towards the closest support of additional $25 poses a threat of a continuous decline in the direction of 1,146 (weekly S1).
Hourly chart
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Read More: Technical Analysis
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 75.54% at the moment, up more than two percentage points in course of the weekend. 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 positive with respect to the yellow metal, as there are 69% of bullish positions registered by 7:00 GMT this Monday.
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 just below 1,250 by the end of June. At the same time, a half of them still believe the bullion will be strongly above this mark in three months, while 31% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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