- Opened positions on gold are strongly bullish (65% long / 35% short)
- The immediate resistance for the yellow metal is currently located at 1,179
- At the same time, the nearby support for the bullion is placed at 1,171
- Upcoming events in the next 24 hours: Germany IFO Business Climate (Jun), US Final GDP (Q1), UK BBA Mortgage Approvals (May), Swiss National Bank Quarterly Bulletin (Q2)
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Gold dropped to the lowest level in a week on Wednesday, as the US Dollar strengthened, while global equity markets continued to rise amid expectations of Greece's debt deal. Bullion, often considered as an alternative investment in times of turmoil, has come under pressure as the Greek government expressed confidence that parliament would endorse a debt deal with creditors.
Meanwhile, orders placed with US factories for long-lasting manufactured goods dropped in May, led by a precipitous decline in demand for aircraft. According to the Commerce Department, total orders for durable goods plunged 1.8% in the reported month following the 1.5% decrease in April, which was also caused by the 35.3% dip in orders for aircraft. However, core durable goods orders, which exclude volatile transportation component, rose 0.5%.
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Euro group to discuss Greece today, US releases GDP data
On June 24 the finance ministers of the Euro zone countries will meet together for a third time this week in order to discuss progress in negotiations with Greece. Additionally, the market will pay a lot of attention to the world's biggest economy, where the final GDP numbers are due at 12:30 PM GMT.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 losing streak of XAU/USD was prolonged to three consecutive days on Tuesday, as the metal continued to under-perform despite signs the recovery might take place. The risks of a further decline are growing, considering the fact that the bullion is now hovering below the 2013 low and weekly S1 at 1,180. The nearest support is offered by the lower Bollinger band at 1,171, followed by the monthly S1/Jun 5 low at 1,162.
Hourly chart
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Read More: Technical Analysis
SWFX long open positions resume growing
Meanwhile, OANDA's bulls are in the safe majority with 78.09% (+5%) 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% (+3%) of bullish trades registered by 5:30 AM GMT on June 24.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 24 and Jun 24 expect, on average, to see Gold trading around 1,190 by the end of September. At the same time, 53% of them believe the bullion will be above 1,200 in three months, while 25% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA