- Opened positions on gold are strongly bullish (75% long / 25% short)
- The closest resistance for the yellow metal is currently located at 1,188
- At the same time, the closest support for the bullion is placed at 1,179
- Upcoming events on June 12: Euro zone Industrial Production (Apr), US PPI (May) and Reuters/Michigan Consumer Sentiment Index (Jun), China New Loans (May)
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Gold traded near its one-week high on Thursday amid safe-haven bids from the Greek debt crisis and a weaker Dollar. Meanwhile, the assets of the world's biggest exchange-traded gold fund dived to their lowest level since September 2008, the month when Lehman Brothers filed for bankruptcy. Moreover, the worst may not be over amid robust equities and prospects of US interest rates hike.
The outflows from bullion-backed funds could further drive global gold prices lower, particularly as physical demand is sluggish in Asia, the biggest consuming region. The SPDR Gold Trust said its holdings declined to 704.23 tonnes, or 22.6 million ounces, on Wednesday. They have nearly halved from their high of 43.43 million ounces in less than three years, largely due to the bearish turn in gold.
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US data to drive markets on June 12
The US Department of Labour will release the producer price index for May by 12:30 PM GMT tomorrow, where a 0.4% rebound is expected, even though this indicator has previously missed estimates since February of this year. Alongside, the University of Michigan is going to publish its monthly consumer confidence survey, where the benchmark sentiment indicator is currently forecasted to increase marginally up to 91.3 points.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 1,115. 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 1,210 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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The XAU/USD cross has finally breached the nearest resistance at 1,179, represented by the weekly PP. Moreover, the bullion went further to the north, while closing the Wednesday's trading session above the June 4 high at 1,186. In case gold preserves its bullish momentum on June 11, it will be anticipated to grow as high as monthly PP/55-day SMA at 1,197 in the short-term. Despite that, the majority of technical indicators still see the yellow metal lower.
Hourly chart
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SWFX long opened positions on gold advance further
Meanwhile, OANDA's bulls are in the safe majority with 71.14% of all current positions. Gold's sentiment at OANDA is the second most positive among all major currency pairs at the moment. Saxo Bank market participants are also optimistic with respect to the precious metal, as there were 62% of bullish trades registered by 5:30 AM GMT on June 11.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 11 and June 11 expect, on average, to see Gold trading around 1,230 by the end of September. At the same time, 63% of them believe the bullion will be even strongly above 1,200 in three months, while 24% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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