- Opened positions on gold are strongly bullish (70% long / 30% 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 1,169
- Upcoming events in the next 24 hours: US Unemployment Claims (Jun 19) and Services PMI (Jun), EU Economic Summit, New Zealand Trade Balance (May), Japan CPI (May) and Unemployment Rate (May)
© Dukascopy Bank SA
On Thursday, however, gold started to recover, following a slide in the past four trading sessions to two-week low, as still no progress has been made in Greece talks with its international creditors. A top-level meeting of European leaders will resume later in the day to come to a last-minute deal and avert default in Greece. The country is obliged to repay 1.6 billion euros to the International Monetary Fund next week.
Meanwhile, the US economy contracted in the first quarter less than previously estimated as it struggled with bad weather, a strong US Dollar, spending cuts in the energy sector and disruptions at West Coast ports. The American gross domestic product declined at a 0.2% annualized rate, compared with the 0.7% drop reported previously, according to revised data from the Commerce Department. The data bolstered Fed's projections that the setback was temporary. The US growth was supported by robust consumer spending, which accounts for more than two thirds of US economic output.
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Focus shifts to New Zealand and Japan on Thursday
Despite quite influential data that is going to be published in the US on Thursday, the main focus will be on two major Asia-Pacific economies, namely Japan and New Zealand. The former is releasing the inflation and labour market data today, which is due at 23:30 PM GMT. The South Pacific country will in turn announce the trade balance numbers at 22:45 PM GMT, with the trade gap expected to widen in May. In the meantime, US jobless claims have probably stayed broadly unchanged around 270,000 last week, while personal spending is forecasted to have gained 0.7% last month.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
© Dukascopy Bank SA
Penetration of the major support zone at 1,180 (2013 low and weekly S1) was supposed to provide the precious metal with significant bearish momentum. Yesterday the metal posted a decline, but losses were limited by the lower Bollinger band at 1,171. This technical level is, however, not considered to be reliable enough in order to keep bears aside for a long period of time. Therefore, additional attempts to fall as low as Jun low/monthly S1 at 1,162 are likely to take place in the near term.
Hourly chart
© Dukascopy Bank SA
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SWFX long open positions reach 70%
Meanwhile, OANDA's bulls are in the safe majority with 80.13% 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 67% (+4%) of bullish trades registered by 5:30 AM GMT on June 25.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 25 and Jun 25 expect, on average, to see Gold trading around 1,190 by the end of September. At the same time, 55% of them believe the bullion will be 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.
© Dukascopy Bank SA