- Opened positions on Gold remain positive (68% bullish / 32% 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 1,158
- Upcoming events on March 12: Germany, France, Spain CPI (Feb), Bundesbank President Weidmann Speech, Euro zone Industrial Production (Jan), US Retail Sales (Feb) and Unemployment Claims (Mar 6), Bank of England Governor Carney Speech, UK Trade Balance (Jan), Australia Employment Change and Unemployment Rate (Feb)
© Dukascopy Bank SA
Gold stuck near a three-month low, falling in the last seven trading sessions as a strong Greenback and expectations of monetary policy normalization in the US dented investors' interest in the precious metal. The US Dollar hit its highest since September 2003 versus a basket of major currencies, making gold more expensive for holders of other currencies, while risk of earlier rate-hike undermines demand for non-interest-bearing bullion, pushing its prices lower. Meanwhile, investors are watching developments in Greece, where prolonged uncertainty could support safe-haven bullion.
In the meantime, US wholesale inventories surprisingly rose in January, as sales dropped the most since 2009. According to the Commerce Department, wholesale inventories climbed 0.3%, with sales at wholesalers declining 3.1% in January following the 0.9% drop a month earlier. On an annual basis, sales were 1% lower in January of 2015 than they were a year earlier.
Watch More: Dukascopy TV
BoE and Bundesbank chiefs to speak on March 12
Tomorrow, the heads of two major central banks in Europe and giving speeches that are likely to give some impetus to markets and drive Gold as well. At first, the Bundesbank President Jens Weidmann will hold a press conference in Frankfurt, while presenting the Annual Report 2014. Apart from him, the Bank of England's Governor Mark Carney will speak at the Advanced Manufacturing Research Centre in Sheffield, UK. Moreover, this news will also be actively supported by important fundamental indicators from all around the globe.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
© Dukascopy Bank SA
Despite registering a decline, Gold developed in a much more stable and less volatile environment during the trading session on Tuesday. The bullion was actively supported by the lower Bollinger band at 1,160 which refused to give up and open the way towards 1,146 (weekly S1). Moreover, on Wednesday morning Gold is showing some intentions for a rebound. In case of a successful bullish move, we may observe the yellow metal going up to the monthly S1 at 1,173. Additionally, the moderately bullish outlook is shared by technical indicators on a weekly time-frame.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
SWFX opened positions remain positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 69.45% at the moment, thus giving a slight decrease from yesterday. As a result, Gold's sentiment is currently the fourth 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 68% of bullish positions registered by 7:00 GMT on March 11, no change from Tuesday.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 11 and Mar 11 expect, on average, to see Gold trading around 1,220 by the end of June. At the same time, 52% of them still believe the bullion will be strongly 1,200 mark in three months, while 31% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA