- Opened positions on Gold remain strongly positive (74% bullish / 26% bearish)
- The closest resistance for the yellow metal is currently located at 1,194
- At the same time, the closest support for the bullion is placed at 1,191
- Upcoming events on May 14: US Unemployment Claims (May 8), China New Loans (Apr)
Gold rose to the highest level in a week on Wednesday, boosted by a weakness in US Dollar and global equities. Yet, bullion's uptrend remains limited due to uncertainty over the timing of US interest rate hike. The yellow metal has also been hurt by outflows from bullion exchange-traded funds. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw the steepest one-day drop in holdings this year on Friday of nearly 11 tonnes. Further significant outflows from the fund are likely to affect any price rally, or even push gold lower.
Meanwhile, Japan's current-account surplus widened to the most in seven years in March, supported by an improvement in the trade balance as well as increased income from overseas. The surplus in the current account, the broadest measure of Japan's trade with the rest of the world, was 2.8 trillion yen in the reported month, the Ministry of Finance said, expanding from 1.44 trillion yen in February.
Silent Thursday to follow important data releases on Wednesday
Following high-importance statistical data inflows on Wednesday, including GDP numbers from many Euro zone's countries, the next working day is unlikely to provide markets with significant impetus. Among news to be published on Thursday, the US jobless claims are set to increase marginally from 265,000 last week to 272,000 for the period ended May 8.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 gains are likely to be limited and the bullion should be driven by the 200-day SMA around 1,220 with a slight bearish bias. Eventually, bears are forecasted to overtake a lead and drive the metal back to the south. The overall negative trend for Gold seems to be the case in the long-term future, while at the end of this year the precious metal is likely to consolidate around 1,150, if the present trend persists.Daily chart
Gold has been trading broadly around the dense cluster of technical levels at 1,190 for the past seven days. Yesterday, in turn, the precious metal gained value and rebounded above the 55-day SMA, while nearing the monthly PP at the same time. For the time being, only an appreciation above the latter mentioned level with clarify the near-term bullish outlook for Gold, where the target will be set at 1,214 (Apr 28 high). However, in case of a drop below 1,177 (weekly S1), the probability of XAU/USD's stronger slump will rise considerably.
Hourly chart
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 reached 71.80% 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 56% of bullish positions registered by 5:30 AM on May 13.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 13 and May 13 expect, on average, to see Gold trading around 1,200 by the end of August. At the same time, 54% of them still believe the bullion will be above this mark in three months, while 27% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.