- Opened positions on Gold remain strongly positive (73% bullish / 27% 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 1,200
- Upcoming events on April 29: ECB Economic Bulletin, US GDP (Q1) and Pending Home Sales (Mar), FOMC Statement and Federal Funds Rate, Switzerland UBS Consumption Indicator (Mar), Germany CPI (Apr), Reserve Bank of New Zealand Interest Rate Decision
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Gold soared on Tuesday to trade near $1,200 an ounce, posting the biggest gain in three months, ahead of the Fed's two-day policy meeting. Investors increasingly expect the US central bank to refrain from a June rate hike amid a mixed outlook for the world's number one economy. After data last week showed orders for durable goods fell and purchases of new homes declined more than expected, investors will watch closely Wednesday's report on first-quarter economic growth.
Meanwhile, activity growth in the US services sector slowed in April amid a decline in new business growth, but the pace of employment in the sector quickened to the fastest since last June. Markit's flash reading of services PMI slid to 57.8 in the current month from a final 59.2 in March, the highest level since August.
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US GDP data, FOMC interest rate decision to be watched on Wednesday
Wednesday is considered as one of the richest on fundamentals days of this week. All markets will be definitely paying attention to US GDP numbers for Q1, as the pace economic growth in forecasted to decrease down to just 1%. Following that, the Federal Open Market Committee will make an interest rate decision, with no changes expected to take place yet. Along with the Fed, the Reserve Bank of New Zealand is also likely to keep the monetary policy stance 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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Waiting for the meeting on the Federal Reserve on Wednesday, Gold has declined noticeably in the beginning of this week. Markets are expecting the Fed to postpone a rate hike due to economy's poor performance in the beginning of the year. From the technical point of view, major support for XAU/USD was created by the 2013 low, which denied the bears' idea of pushing the bullion below 1,180. However, the upper trend-line of April's down-trend remains in place; therefore, a bounce back in the short-term is not completely ruled out. Aggregate daily technical indicators, however, are broadly neutral at the moment.
Hourly chart
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SWFX opened positions on Gold remain strongly positive
Meanwhile, OANDA's bulls continue to enjoy a stable majority, even though their share of total opened positions declined more than five percentage points during past 24 hours to reach 61.13% on Tuesday. Gold's sentiment at OANDA is currently only the seventh most positive among all major currency pairs, a loss of two positions since yesterday. Saxo Bank market participants, from their side, are also optimistic with respect to the precious metal, as there are 57% of bullish positions registered by 5:30am GMT on April 28.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 28 and Apr 28 expect, on average, to see Gold trading around 1,230 by the end of July. At the same time, 48% of them still believe the bullion will be even above 1,250 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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