- Opened positions on Gold remain bullish (56% long / 44% short)
- The closest resistance for the yellow metal is currently located at 1,241
- At the same time, the closest support for the bullion is placed at 1,216
- Upcoming events on May 19: Germany ZEW Economic Sentiment (May), Euro zone Final CPI (Apr) and Trade Balance (Apr), US Building Permits (Apr), UK CPI (Apr), Japan Prelim GDP (Q1)
Gold traded near the highest level in three months on Monday, supported by weak US data, which fuelled speculation the Fed would refrain from hiking interest rates in the foreseeable future. The yellow metal was also buoyed by the Greenback, which hovered around a three-month low against the Euro in early Asian trading session on Monday following weak data on US industrial output and consumer sentiment. Investors are now looking forward to minutes of the Fed's April policy meeting, due on Wednesday, for clues on the central bank's view on the state of the US economy and when it could raise rates.
Meanwhile, Canada's manufacturing sales rose more than expected in March, Statistics Canada said. Manufacturing sales increased 2.9% to $51.0 billion in the reported month, the second gain in six months, led by a rise in the production of aerospace products and parts along with gains in the motor vehicle industry. Yet, a decline in sales of fabricated metal products partially offset the increase.
Euro zone, UK inflation to stay at zero level in April
Tomorrow, both UK and Euro zone's statistical authorities will release the final consumer prices' data for April of this year. Both indicators, however, are assumed to stay completely unchanged at 0% level. Besides that, Japanese economy is forecasted to increase by 0.4% in the first quarter of 2015.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
The American Dollar has been showing weakness for the past five trading days. As a result, Gold managed to rise in price considerably. It continued to develop beyond the 200-day SMA on Friday, which now seems to act as the closest support line. In case bulls decide to drive the yellow metal further upwards, the nearest resistance will be located as far as 1,241 (weekly R1), compared with the present trading level of 1,229. In the meantime, daily technical studies support neither bulls nor bears at the moment.
Hourly chart
SWFX opened positions on Gold remain positive, but bullish advantage decreases
Meanwhile, OANDA's bulls continue to enjoy a stable majority with 58.71% of all current positions. However, Gold's sentiment at OANDA is only the eight most positive among all major currency pairs at the moment. 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 (53%) over the bearish ones (47%) by 5:30 AM on May 18.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 18 and May 18 expect, on average, to see Gold trading around 1,200 by the end of August. At the same time, 57% of them believe the bullion will be above this mark in three months, while 23% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.