- Opened positions on Gold remain strongly positive (71% bullish / 29% bearish)
- The closest resistance for the yellow metal is currently located at 1,217
- At the same time, the closest support for the bullion is placed at 1,213
- Upcoming events on May 15: US Industrial Production (Apr) and Empire State Manufacturing Index (May), BoJ Governor Kuroda Speech, Canada Manufacturing Sales (Mar)
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Gold surged well above the key $1,200 an ounce to the highest level in five weeks as the US Dollar declined to a three-month low following worse-than-expected US retail sales data. US retail sales remained unchanged last month as households refrained from lavish spending on automobiles and other big-ticket items, pointing to the US economy's struggle to make a strong bounce back after barely growing in the beginning of the year. Retail sales are a key barometer for overall consumer spending, which makes up around two-thirds of US economic output. During the first quarter, households remained cautious due to bad weather and a broader economic slowdown.
Meanwhile, China's industrial production increased 5.9% in April from the previous year, following the 5.6% gain in March, which marked the weakest level since 2008. Fixed-asset investment rose 12%, the least in almost 15 years and against economists' forecast of a 13.5% gain, according to the National Bureau of Statistics.
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US manufacturing data to drive markets on May 15
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.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. Two pattern's boundaries are represented by the upper trend-line around 1,270 and pattern's support at 1,120. Among recent developments, in March 2015 the yellow metal resumed gaining value, even without touching the lower trend-line. In the foreseeable future 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. Some short-term gains in the direction of the long-term downtrend (1,270) are not completely off the table, but bears are eventually going to overtake a lead and drive the metal back to the south. The overall negative tendency for Gold seems to be the case in the long run, while at the end of this year the precious metal should to consolidate around 1,150, in case the present trend persists.Daily chart
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As a reaction to disappointing US fundamentals, the precious metal grew noticeably on Wednesday, by registering its fastest daily gain in almost three weeks. Moreover, while supported by the monthly pivot point, Gold received confident bullish momentum to jump as high as the next monthly resistance at 1,213. However, the latter level is currently reinforced by the 200-day SMA from above, which will attempt to send XAU/USD back to the downside, at least below the 100-day SMA at 1,210. However, a move north of the weekly R3 at 1,221 should encourage bulls for further gains up to 1,236 (Feb 16 high).
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 tanked considerably during the past 24 hours, down by around nine percentage points to 62.95%. Gold's sentiment at OANDA is currently the sixth most positive among all major currency pairs, a loss of four positions on a daily basis. Saxo Bank market participants, from their side, are also optimistic with respect to the precious metal, but there is only a slight advantage of bullish positions (52%) over the bearish ones (48%) by 5:30 AM on May 14.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 14 and May 14 expect, on average, to see Gold trading around 1,200 by the end of August. At the same time, 56% of them believe the bullion will be above this mark in three months, while 25% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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