- Opened positions on Gold remain strongly positive (72% bullish / 28% bearish)
- The closest resistance for the yellow metal is currently located at 1,197
- At the same time, the closest support for the bullion is placed at 1,188
- Upcoming events on April 22: US Existing Home Sales (Mar), Euro zone Consumer Confidence (Apr), Australia CPI (Q1), Bank of England's MPC Meeting Minutes
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Gold slid below the key $1,200 an ounce level on Tuesday as a rally in global equities and a stronger US Dollar undermined the precious metal's appeal as safe haven. The Greenback gained broadly on Monday, with the Euro losing more than half a percent versus the US Dollar, amid increasing fears that Greece may default on debts. Greece seems both unwilling and unable to pay the dues that accompany its Euro membership. Thus, it plans to wrap up negotiation on the package of economic reforms required to unlock more funding in time for a meeting of Euro zone finance ministers on April 24 in Riga, Latvia.
Meanwhile, US consumer sentiment rose more than expected in April to the second-highest level in more than eight years as Americans were more optimistic about the economic outlook and inflation. The University of Michigan said that its preliminary index of sentiment rose to 95.9 this month from 93 in March.
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Australian inflation to cool down in Q1
On Wednesday morning, Australian statistical officials will release the consumer price index in the country for the first quarter of 2015. The indicator is, however, forecasted to decrease from 1.7% to 1.3% on the annual basis and will probably remain unchanged at 0.2% quarter-on-quarter. Later on, the Bank of England will publish minutes of the Monetary Policy Committee's last meeting, with all members expected to have voted for keeping rates unchanged.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, at that time located around 1,150. Towards the end of June the bullion is likely to develop in the direction of the upper boundary of this pattern just below 1,260 where bears are forecasted to overtake a lead and drive the metal back to the south. However, the metal can also be stopped by the 200-day SMA around 1,220. The overall negative trend for Gold seems 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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Gold denied violating boundaries of the sideways corridor, in which the metal has been developing for the past eight trading days. Yesterday in particular, volatility of price changes has also gone up, while the bullion itself dropped back below 1,200. It seems that both weekly PP/55-day SMA have little influence on the precious metal, and some broader movement should determine the future direction. The base scenario remains bearish, and the case of closure below 1,183 (monthly PP) will confirm negative expectations. Otherwise, a surge above 1,213 will open doors for bulls to push Gold towards 1,224 in the medium-term.
Hourly chart
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Read More: Technical Analysis
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 65.18% at the moment, and Gold's sentiment there is currently the fourth most positive among all major currency pairs. Saxo Bank market participants, in turn, are also confident with respect to the precious metal, as there are 61% of bullish positions registered by 5:30am GMT on April 21.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 241 and Apr 21 expect, on average, to see Gold trading just below 1,250 by the end of July. At the same time, 51% of them still believe the bullion will be strongly above this mark in three months, while 33% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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