- Opened positions on Gold remain positive (64% bullish / 36% bearish)
- The closest resistance for the yellow metal is currently located at 1,210
- At the same time, the closest support for the bullion is placed at 1,199
- Upcoming events on April 3: US Non-farm Payrolls and Unemployment Rate (Mar), China HSBC Services PMI (Mar), Japan Services PMI (Mar)
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Gold traded above $1,200 an ounce on Thursday, adding to gains from the previous session when it climbed the most in two months, as soft US ADP non-farm employment change data signalled that a more comprehensive labour market data could disappoint. Nevertheless, the precious metal remained weak and vulnerable, as further gains in the bullion price may be limited as investors pare back expectations for US non-farm payrolls after poor ADP's jobs data.
The ADP report on the US labour market surprised to the downside, as fewer jobs were added in March than predicted. ADP non-farm employment increased by 189,000 in March, considerably below expectations of a 225,000 rise. However, last month's data was revised upward to 214,000 from 212,000. The ADP employment change is considered as one of the leading indicators of labour market strength in the world's biggest economy
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US non-farm payrolls likely to weigh on Gold price on Friday
Tomorrow, the US Department of Labour will announce important data concerning the country's employment. Judging from the average expectations, employment's growth has probably decreased significantly in March. If real data is released in line with predictions or even worse, markets may significantly price in this negative change. Gold will not be an exception as it has always been sensitive to any sharp changes.Read More: Fundamental Analysis
XAU/USD develops inside bearish wedge pattern on daily chart
Since the second quarter of 2013, the bullion has been developing inside the falling wedge pattern, meaning that trading range is decreasing as time goes on. In March 2014, however, the yellow metal resumed gaining value, even without touching the lower trend-line which is currently located around 1,100. Therefore, towards the end of April the bullion is likely to approach the upper boundary of this pattern just below 1,280 where bears are forecasted to overtake a lead and drive the metal back to the south. The overall negative trend for Gold seems also inevitable in the long-term future, while at the end of this year the precious metal is likely to consolidate around 1,150, in case the present trend persists.Daily chart
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The sharpest increase in Gold's price since January 30 took place on Wednesday. The bullion gained more than $20 per ounce amid worse than expected fundamentals from the US. By beginning trading at monthly PP, the yellow metal pierced through two technical levels (20-day SMA and weekly PP) and closed just below the four-week up-trend line at 1,204. Despite that move, daily technical indicators do not give up and continue sending positive signals. However, after such strong growth, a correction seems more appropriate, but it should be capped by 1,199 (weekly PP) in the short-term.
Hourly chart
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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 57.88% at the moment, a plunge of more than four percentage points during past 24 hours. Therefore, Gold's sentiment is currently only the seventh most positive among major currency pairs at OANDA, down three positions since Wednesday. SaxoGroup market participants, in turn, are also positive with respect to the precious metal, as there are 60% (-5%) of bullish positions registered by 5:30 GMT on April 2.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 2 and Apr 2 expect, on average, to see Gold trading at 1,200 by the end of July. At the same time, 53% of them still believe the bullion will be strongly above this mark in three months, while 32% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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