- Opened positions on Gold remain positive (70% bullish / 30% 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 1,160
- Upcoming events on March 21-23: Euro zone Consumer Confidence (Mar), US Existing Home Sales (Feb)
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Gold prices eased during Thursday's trading session, being that US Dollar recovered some of losses it accumulated a day before. On Wednesday-Thursday night, the Greenback posted its biggest daily loss in 18 months, following more dovish stance from the Fed. Still, Gold is down around 2% on year-to-date basis, as general expectations for higher rate could decrease demand for non-yielding yellow metal. Meanwhile, holdings in SPDR Gold Trust rose for first time since Feb 20, by 0.24% to 749.77 tonnes.
Concerning fundamental factors, US current account deficit retreated substantially in the fourth quarter of the year 2014. The negative gap surged 14.7% to reach $113.5 billion during three months ended December 31. It implies the largest deficit in more than two years, and is significantly higher than $98.9 billion registered in July-September quarter of the previous year.
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No fundamentals to influence Gold on Monday
There are very few fundamental factors that are likely to have any impact on the yellow metal at the beginning of the next week. Eurostat, the main statistical agency in the European Union, will only release the consumer confidence index for the monetary union. Along with that, US are releasing existing home sales for February on Monday. However, this data may have more effect on the foreign exchange market, rather than commodity one.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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XAU/USD cross made the second attempt in two days to breach one of the strongest resistance levels that are located close to current trading levels. However, this supply represented by monthly S1 and weekly R1 at 1,173 rejected the second chance of Gold to grow above it. However, it is likely that the yellow metal will try to accomplish this goal for a third time on Friday. If it fails, then sell-offs are expected to resume and the metal may drop down to 1,160 (weekly PP) in the short-term and 1,145 (weekly S1) by Monday of the next week.
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 64.52% at the moment, giving an exactly three percentage points' slump in course of past 24 hours. In addition, 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 58% of bullish positions registered by 7:15 GMT on March 20.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 20 and Mar 20 expect, on average, to see Gold trading just below 1,200 by the end of June. At the same time, 52% 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 1,050 and 1,200.
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