- Opened positions on Gold remain strongly positive (72% bullish / 28% bearish)
- The closest resistance for the yellow metal is currently located at 1,206
- At the same time, the closest support for the bullion is placed at 1,196
- Upcoming events on April 15: Germany and France CPI (Mar), Euro zone Trade Balance (Feb), ECB Interest Rate Decision, China Industrial Production (Mar) and GDP (Q1), Japan Industrial Production (Feb), Bank of Canada Interest Rate Decision
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Gold rose above $1,200 an ounce on Tuesday, following a 1% decline in the previous trading session, while prospects of the US interest rate hike in the near term continue to limit any upside movement. Recent comments from Fed policy makers show the US central bank has not ruled out the possibility of increasing federal funds rate in June despite signs of renewed weakness in the world's number one economy.
The US budget deficit, which has shrank from the highest level on record of $1.4 trillion in 2009 to $483.3 billion in 2014, is estimated to continue contracting in 2015 and 2016, though reforms to compulsory spending and taxation measures will be required to prevent increases after 2018. The country has been operating under a debt limit imposed on March 16, which prohibits the government to add to its total borrowing.
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China to release GDP numbers on April 15
Wednesday of this week will be extremely rich on fundamental statistics from different parts of the world. Among them, the European Central Bank and the Bank of Canada will both make scheduled benchmark interest rate decisions. However, for Gold the most significant part will most likely come from Asia, and particularly China, where investors are waiting to see the gross domestic product figures for the first quarter of 2015. According to average expectations, the Chinese economy's growth has probably cooled down to 7% in Q1.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 trading range of XAU/USD remained under pressure between to technical lines on Monday, Gold still managed to stay within its boundaries during the day. Following a jump up to the 55-day SMA on Friday, this level pushed the bullion back towards the 20-day SMA yesterday, where the metal closed trading session just below 1,200. Currently, there are two dense areas around present market price of Gold. In case it falls below 1,191, then we should observe a sell-off down to 1,180 (2013 low) in the near-term. Otherwise, a climb above 1,211 will provide bulls with momentum to send the precious metal as high as 1,223 (monthly R1).
Hourly chart
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SWFX opened positions on Gold remain strongly positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened positions stays at 64.71% (+3%) at the moment, and Gold's sentiment there is currently the fourth most positive among all major currency pairs there. Saxo Bank market participants, in turn, are also confident with respect to the precious metal, as there are 60% of bullish positions registered by 5:30am GMT on April 14.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 14 and Apr 14 expect, on average, to see Gold trading around 1,250 by the end of July. At the same time, 60% of them believe the bullion will be strongly above this mark in three months, while 28% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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