- Opened positions on gold are strongly bullish (73% long / 27% short)
- The closest resistance for the yellow metal is currently located at 1,180
- At the same time, the closest support for the bullion is placed at 1,169
- Upcoming events on June 16: Germany CPI (May) and ZEW Economic Sentiment (Jun), Euro zone Employment Change (Q1), US Housing Starts and Building Permits (Apr), RBA Meeting Minutes, UK CPI and PPI (May)
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Prices of finished goods and services sold by manufacturers in the US jumped 0.5% in May of this year, while exceeding the average economists' estimates of a 0.4% increase. This data follows four straight months of missing expectations, when three of them posted a decline. Therefore, the May numbers are pointing to a considerable improvement is sentiment among producers, which are favouring to increase prices, as the world's biggest economy is getting back on track.
At the same time, the annual indicator for producer prices decreased from 1.3% to 1.1% in May, matching expectations. The core reading, which excludes volatile items, such as food, energy and trade, was up just 0.1% last month on a monthly basis and 0.6% year-on-year, also swinging back to growth.
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UK inflation forecasted to jump back above zero
The CPI reading in Britain is currently estimated to rebound considerably in May, as the average economists' expectations suggest that the country's consumer prices added 0.1% last month on the annual basis, following a decrease of 0.1% in April. This particular data release is awaited at 8:30 AM GMT. In the US, building permits and housing starts have probably deteriorated slightly in April, the announcement will show at 12:30 PM GMT on Tuesday. However, both of them will follow the March reading, the highest since December 2007.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 yellow metal was mainly flat last Friday, as markets are getting ready for this week's Federal Reserve meeting. This anticipation kept both bulls and bears at bay, and the bullion decided to move sideways. The present trading level is located just around the weekly PP at 1,180. The dense resistance area at 1,195 (55-day SMA, monthly PP) is unlikely to let bulls surpass this zone. On the other hand, sustainable support for gold should be created at 1,162, where the monthly S1 meets the Jun 5 low.
Hourly chart
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SWFX long opened positions on gold above 70%
Meanwhile, OANDA's bulls are in the safe majority with 73.14% 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 63% of bullish trades registered by 5:30 AM GMT on June 15.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 15 and June 15 expect, on average, to see Gold trading around 1,200 by the end of September. At the same time, 55% of them believe the bullion will be even strongly above this level in three months, while 27% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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