- Opened positions on gold are strongly bullish (71% long / 29% 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 1,167
- Upcoming events in the next 72 hours: Germany Import Price Index (May), EU Economic Summit (Day 2), Euro zone M3 Money Supply (May), US Revised Reuters/Michigan Consumer Sentiment (May), Bank of England Governor Mark Carney Speaks, Japan Industrial Production (May)
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On Friday, however, gold recovered from the lowest level in more than two weeks as Greece failed to strike a deal with its international creditors. Yet, gains remained limited by expectations of US interest rate hike later this year. European finance ministers are set to meet once again on Saturday, with the German Chancellor Angela Merkel saying that the meeting will be of decisive importance, as it either averts Greece's default next week or marks a start of preparation to safeguard the Euro zone from financial market turmoil.
Meanwhile, the number of Americans, who applied for unemployment assistance in the week ended June, rose but remained at a level consistent with a strengthening labour market. According to the US Department of Labor, US initial jobless claims increased by 3,000 to a seasonally adjusted 271,000, up from a revised 268,000 in the preceding week. Initial unemployment claims have held below the 300,000-level for 16 straight weeks, which is associated with an improving labour market.
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EU talks to continue in Brussels, Mark Carney to speak in London
Talks among leaders of the European countries are going to continue Friday, where presidents and prime ministers are discussing a bunch of actual issues for the union, including migration crisis and relations between the EU and Britain, as membership referendum in the UK is going to take place in course of the next two years. In the meantime, the Bank of England's Governor Mark Carney will speak today at the 2015 Conference on Inclusive Capitalism in London, where he is due to participate in the panel discussion at 14:15 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 bullion is using the opportunity to decline in value, provided with broad free space down to the monthly S1 at 1,162. As a result, the metal has already been slumping for a fourth consecutive day, while a confident recovery is unlikely in the short term. Gold seems to have consolidated below the 2013 low/weekly S1 (1,180), making the idea of growth even more difficult to implement. Nonetheless, the probability of slight upside changes still exists, especially considering a strong buy signal from the technical studies.
Hourly chart
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Read More: Technical Analysis
SWFX long open positions reach 70%
Meanwhile, OANDA's bulls are in the safe majority with 80.25% 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 69% (+2%) of bullish trades registered by 5:30 AM GMT on June 26.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 26 and Jun 26 expect, on average, to see Gold trading around 1,190 by the end of September. At the same time, 56% 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.
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