- Opened positions on gold are strongly bullish (68% long / 32% short)
- The immediate resistance for the yellow metal is currently located at 1,180
- At the same time, the nearby support for the bullion is placed at 1,162
- Upcoming events in the next 24 hours: ECB Monetary Policy Meeting Accounts, US Non-Farm Payrolls (Jun), Unemployment Rate (Jun), Unemployment Claims (Jun 26) and Factory Orders (May), China Services PMI (Jun), UK Construction PMI (May), Australia Retail Sales (May)
Gold prolonged its losses for the third consecutive day on Thursday, falling close to its four-week low amid a strong US Dollar and prospects of US interest rate hike later in the year. The Dollar index retreated slightly after reaching the highest level in around three week, supported by robust US private employment data and Euro's depreciation after Greece defaulted on a loan repayment to the International Monetary Fund. US private sector added 237,000, following the revised 203,000 in May and overshooting economists' expectations for an upturn to 218,000. The ADP figures were released prior to the US Labor Department's more comprehensive non-farm payrolls report later in the day, which includes both public and private-sector employment.
Separately, US manufacturing growth accelerated in June, as the ISM manufacturing PMI rose to 53.5 in the reported month, up from 52.8 in May. The ISM report showed factory orders and employment in June stood at their highest levels since December 2014. The employment indicator rose to 55.5 from 51.7, adding to signs that many companies expect additional orders in the coming months and are hiring in advance.
All eyes on US employment data today
The bullion is estimated to be driven by US labour market data Thursday. Non-farm payrolls, jobless rate and unemployment claims are all due to be published at 12:30 PM GMT. At the same time, factory orders will be released at 14:00 PM GMT. All but the latter data release are going to reveal a continuous improvement, which may put pressure on the Fed in terms of raising the benchmark interest rate as soon as September.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, but the growth stalled beneath the 2009 high at 1,230. In the foreseeable future the rally is likely to be limited and the bullion should be driven by the 200-day SMA around 1,200, which has 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
At the moment XAU/USD is falling further in the direction of the nearest support, which is placed at 1,162 (Jun 5 low, weekly S1 and lower Bollinger band). The cross has already been losing value for a fourth consecutive day, and the trend is likely to persist in the near-term. However, a decline is not guaranteed in the medium-term, according to the weekly technical indicators. A local bottom can be reached around the mentioned demand zone, which also merges with the lower boundary of the Jun 19-Jul 2 bearish channel.
Hourly chart
SWFX long open positions decreased slightly
Meanwhile, OANDA's bulls are in the safe majority with 80.62% 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 70% of bullish trades registered by 5:30 AM GMT on July 2.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jun 2 and Jul 2 expect, on average, to see Gold trading around 1,200 by the end of September. At the same time, 51% 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.