- Opened positions on Gold remain strongly positive (75% bullish / 25% bearish)
- The closest resistance for the yellow metal is currently located at 1,187
- At the same time, the closest support for the bullion is placed at 1,180
- Upcoming events on May 4: Euro zone Manufacturing PMI (Apr), US Factory Orders (Mar), China HSBC Manufacturing PMI (Apr)
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Gold steadied on Friday following the dramatic 2% decline in the previous session, when the precious metal broke through the key $1,200 an ounce. The latest data showed the number of Americans applying for unemployment benefits declined last week to the lowest level in 15 years, suggesting healthy job growth. Meanwhile, investors continue to monitor the debt situation in Greece, where Prime Minister Alexis Tsipras' government is under pressure to come to an agreement with its European creditors in order to unlock a tranche of bailout funds.
US initial jobless claims, a proxy for layoffs across the country, plunged by 34,000 to a seasonally adjusted 262,000 in the week ended April 25, according to the Labor Department, marking the lowest level for claims since April 15, 2000. Analysts, however, had expected the gauge to climb to 290,000 in the week
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Manufacturing activity data to be released on May 4
On Monday, a number of major European economies and China are going to reveal their PMI indicators for April, which shows activity changes in production sectors. However, no strong movements are currently expected and the data can be released broadly unchanged on a monthly basis.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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XAU/USD's decline continued on Thursday with even heavier losses. The yellow metal decided to return back below the 1,200 mark, while a drop was only stopped by the 2013 low at 1,180. Without any major technical impetus, this development has largely reflected the Fed's statement on Wednesday. At the moment Gold is under the risk of sliding below 1,180 in the short-term, unless it manages to bounce back above 1,194 (monthly PP), while bears are still likely to target the monthly S1 at 1,164 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 stable majority, and their share of total opened positions gained almost 8% during the past 24 hours to reach 73.56% in the morning today. Gold's sentiment at OANDA is currently the second most positive among all major currency pairs. Saxo Bank market participants, from their side, are also optimistic with respect to the precious metal, as there are 64% of bullish positions registered by 5:30am GMT on May 1.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 1 and May 1 expect, on average, to see Gold trading around 1,230 by the end of July. At the same time, 50% of them still believe the bullion will be even above 1,250 in three months, while 31% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
© Dukascopy Bank SA