- Opened positions on Gold remain positive (65% bullish / 35% bearish)
- The closest resistance for the yellow metal is currently located at 1,214
- At the same time, the closest support for the bullion is placed at 1,211
- Upcoming events on April 8: Germany Factory Orders (Jan), France Trade Balance (Feb), Euro zone Retail Sales (Mar), US FOMC Meeting Minutes, Bank of Japan Monetary Policy Statement, Switzerland CPI (Mar)
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Gold traded below the highest level in seven weeks on Tuesday, after the bullion prices surged to their highest level in nearly two months following soft US employment data last week. Yet, as the US Dollar regained momentum, the precious metal retreated, but remained above $1,200 an ounce amid uncertainty about the US first interest rate hike in almost a decade.
The pace of business activity growth in the US services sector dropped in March to the lowest level in three months, whereas new export orders jumped to the highest in more than two years. According to the Institute for Supply Management, the non-manufacturing PMI declined to 56.5 in the reported period after the previous reading of 56.9 and compared with the market's expectations of 56.5.
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Bank of Japan's meeting to be in focus tomorrow
On Wednesday morning, markets will be awaiting important news from Japan, where the country's central bank will have its scheduled monetary policy meeting. Giving the fact of weakening inflation, unexpected decisions against the expectations are not fully off the table. Following that, markets will receive inflation data from Switzerland, followed by the FOMC meeting minutes later during the day.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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Even though the precious metal has a rather volatile trading session on Monday, it managed to close just marginally above the day's opening mark. Initial bullion reaction, in turn, was caused by far worse than estimated US payrolls' numbers back on Friday, as Gold surged up to 1,224 on this news. However, the bullion returned back below the 55-day SMA and closed at 1,214 yesterday evening. Judging from daily technical indicators, we should observe a sideways development on Tuesday, while longer-term studies expect the bears to take over the leadership.
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 60% at the moment, even though Gold's sentiment there is currently only the seventh most positive among all major currency pairs. SaxoGroup market participants, in turn, are also positive with respect to the precious metal, as there are 62% of bullish positions registered by 5:30 GMT on April 7.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 7 and Apr 7 expect, on average, to see Gold trading just above 1,200 by the end of July. At the same time, 54% 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.
© Dukascopy Bank SA