- Opened positions on Gold remain positive (66% bullish / 34% bearish)
- The closest resistance for the yellow metal is currently located at 1,211
- At the same time, the closest support for the bullion is placed at 1,196
- Upcoming events on April 9: Germany Industrial Production (Feb) and Trade Balance (Feb), US Unemployment Claims (Apr 3), Bank of England Interest Rate Decision and Asset Purchase Facility, Canada Building Permits (Feb)
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Gold traded above $1,200 an ounce on Wednesday amid mounting expectations that the Fed may delay an interest rate increase. Investors were awaiting the release of the FOMC March meeting minutes later today, which might shed light on policy makers' cautious view on the US economy. At its latest meeting, Fed officials removed a pledge to be "patient" in normalizing monetary policy, resulting in mounting speculation of a rate hike as early as June.
Yet, the central bank's cautious economic outlook indicated the Fed's dovish bias, sending the bullion on a seven-day rally in the longest winning streak since 2012. On top of that, earlier in the week, Minneapolis Fed President Narayana Kocherlakota argued that the Fed should be "extraordinarily patient", putting off the rate hike at least until the second half of next year due to still low employment and excessively low inflation.
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BoE makes interest rate decision on April 9
Tomorrow, the Bank of England's Monetary Policy Committee will gather together for a scheduled monthly meeting. The MPC will decide on the benchmark interest rate, along with the QE volume. Both of them are expected to remain without any changes, with the main rate staying at record-low level, considering inflation reading at zero mark.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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On Tuesday, the bullion remained broadly unchanged in its price for the second consecutive day. Three strong technical levels, which consist of 100-day SMA, 55-day SMA and weekly R1 continued to hold Gold from any significant movements. At the moment the yellow metal is hovering just below the first of these mentioned lines at 1,210. Therefore, probability of a slump is higher than likelihood of an advance, and the precious metal may head towards weekly PP at 1,196 in the next two days, as there are no supports to encourage bulls for purchases until that mark.
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 62.66% at the moment, and Gold's sentiment there is currently the fifth most positive among all major currency pairs. SaxoGroup market participants, in turn, are also positive with respect to the precious metal, as there are 61% of bullish positions registered by 5:30 GMT on April 8.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 8 and Apr 8 expect, on average, to see Gold trading around 1,250 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 1,100 and 1,250.
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