- Opened positions on Gold remain positive (74% bullish / 26% bearish)
- The closest resistance for the yellow metal is currently located at 1,160
- At the same time, the closest support for the bullion is placed at 1,145
- Upcoming events on March 18: ECB Non-Monetary Policy Meeting, Italy Trade Balance (Jan), Federal Reserve Interest Rate Decision and Monetary Policy Statement, Bank of England Meeting Minutes, UK Claimant Count Change and Unemployment Rate (Feb), New Zealand GDP (Q4)
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While gold remains steady ahead of the Fed's two-day monetary policy meeting that starts later today, another catalyst for prices of the precious metal has emerged in the bullion market. Recently Apple announced its brand new product – iWatch device, with Edition version coming in a case of 18-carat gold and with a price tag starting from $10,000. As a result, this prompted speculation that it could potentially boost gold prices depending on consumer demand.
Meanwhile, US industrial production rose less than expected in February, clouding optimism over the economic outlook. Output of manufacturers, mines and utility producers climbed 0.1% last month, missing the predicted 0.2% gain and following a downwardly revised 0.3% decline in January. Meanwhile, manufacturing output dropped by a seasonally adjusted 0.2% in February, disappointing forecasts for a 0.1% rise and following the 0.3% decline in January.
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Fed and ECB meeting, BoE minutes to be watched on March 18
Tomorrow, both the European Central Bank and the Federal Reserve are holding meetings of monetary policymakers. However, the most attention will still be paid to US central bank, while the ECB will have a non-monetary policy meeting with no decisions. Besides that, the Bank of England will publish its minutes of the previous meeting, while New Zealand is going to revise its Q4 GDP growth upwards to 3.3% 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-April 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 May.Daily chart
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Broadly speaking, the yellow metal has been unchanged for a fifth consecutive day in a row. Yesterday, the XAU/USD cross was pushed slightly to the downside below 1,160, helped by strength of the weekly pivot point which is placed around the same level. Currently, the bullion is range bound between 1,160 and 1,145 (weekly S1). Therefore, ability to consolidate beyond one of these marks will determine the future development of the precious metal, while daily technical indicators see the break-out to take place to the downside.
Hourly chart
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SWFX opened positions remain positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 68.77% at the moment, giving a slight decline from Monday. 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 63% of bullish positions registered by 6:30 GMT on March 17.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 17 and Mar 17 expect, on average, to see Gold trading around 1,200 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 31% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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