- Opened positions on gold are strongly bullish (72% long / 28% short)
- The immediate resistance for the yellow metal is currently located at 1,192
- At the same time, the nearby support for the bullion is placed at 1,181
- Upcoming events in the next 24 hours: Euro zone Economic Sentiment Indicator (Jun), Germany CPI (Jun), US Pending Home Sales (May), Greece Bank Holiday, UK Net Lending to Individuals (May), New Zealand ANZ Business Confidence (May)
Gold soared along with other safe haven assets on Monday after a breakdown in Greek debt negotiations, with increasing chances that Athens would default and leave the Euro zone. Bailout talks between the Greek government and its international lenders broke down over the weekend and the ECB froze vital funding support to Greece's banks, leaving Athens with little choice but to close banks and impose capital controls to keep the whole system from collapsing. The failure to reach a deal with creditors leaves Greece set to default on 1.6 billion euros of loans from the IMF due on Tuesday. Athens must also repay billions of euros to the ECB in the coming months. The Greek parliament has approved a referendum to decide whether to accept the latest bailout terms.
Meanwhile, US consumers' mood brightened at the end of the month, reinforcing the view the world's number one economy was likely to gather momentum in the foreseeable future. The University of Michigan's final reading of the consumer sentiment index increased to 96.1 points, compared with the markets' expectations for 94.6 and following a revised reading of 90.7 points in May.
US pending home sales to continue growing
It is forecasted that pending home sales in the United States are going to increase by 1.3% in May on the monthly basis, following a 3.4% surge in April. All in all, sales have probably rallied for a fourth consecutive month, underlying strength and recovery of the property market in the world's largest economy. Meanwhile, German inflation is estimated to have slowed down to 0.4% year-on-year in June, down from 0.7% in the preceding month.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
There has been a moderate move to the upside by the bullion on Friday, following four consecutive days of losses that pushed the price of gold below the 2013 low, down to 1,168. However, on Monday the precious metal is rebounding noticeably, following events in Greece. It has already rebounded above the mentioned two-year low and weekly PP to trade at 1,184. The short-term outlook is likely to stay bullish, even though the daily technical indicators are neutral. The nearest resistance is in turn located at 1,192 (55-day SMA).
Hourly chart
SWFX long open positions above 70%
Meanwhile, OANDA's bulls are in the safe majority with 81.83% 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 68% of bullish trades registered by 5:30 AM GMT on June 29.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 29 and Jun 29 expect, on average, to see Gold trading around just below 1,200 by the end of September. At the same time, 56% of them believe the bullion will be above 1,200 in three months, while 26% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.