- Opened positions on Gold remain positive (66% bullish / 34% 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 1,196
- Upcoming events on April 10: France Industrial Output (Feb) and Budget Balance (Feb), US Monthly Budget Statement (Mar), China CPI (Mar), Australia Home Loans (Feb), Switzerland Unemployment Rate (Mar), UK Manufacturing Production (Mar) and NIESR GDP Estimate (3M-Mar), Canada Unemployment Rate and Employment Change (Mar)
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Gold dipped below $1,200 an ounce on Thursday following the release of the FOMC's March meeting minutes. Even though Fed officials were divided on an appropriate date of the first interest rate hike since the financial crisis, a rate lift-off in June remained on the cards despite recent soft data. Some officials predicted upcoming fundamentals to warrant an initial rate hike that month.
There were also a number of policy makers, who argued that the world's biggest economy would not be ready for tighter policy until 2016. The disagreement could present a challenge for Fed Chairwoman Janet Yellen in the months ahead. Yellen led officials to a unanimous decision in March to drop a pledge to be "patient", the change which effectively opened the door to rate increases by midyear.
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UK industrial output expected to rebound in March
There is plenty of important fundamental news that is going to be published in course of this week's last working day. Among them, British manufacturing production is currently forecasted to climb in March, compared with a decline back in February. In the meantime, China is publishing the consumer prices data tomorrow, which will be followed by labour market statistics both in Switzerland and Canada. At last, the UK National Institute of Economic and Social Research will estimate Britain's GDP growth for three months through March 31.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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It seems that three strong resistance levels came together in order to push Gold to the downside. They succeeded in doing that, and the precious metal retreated towards the demand area at 1,196 (weekly PP and 20-day SMA). The bullion is now expected to test strength of this zone on Thursday. In case of a penetration, we will most likely observe a further drop down to 1,183 where weekly S1 and monthly PP have their location. On the other hand, if bulls resist current pressure of shorts, Gold may rebound moderately above 1,200.
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 62.53% at the moment, and Gold's sentiment there is currently the sixth 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 9.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 9 and Apr 9 expect, on average, to see Gold trading around 1,250 by the end of July. At the same time, 52% of them still believe the bullion will be strongly above this mark in three months, while 34% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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