- Most of the traders remain long the gold
- The current ceiling is at 1,110
- The nearest significant demand area is supposed to be at 1,070
- Upcoming events: German Ifo Business Climate (Jul), US (Core) Durable Goods Orders (Jun)
© Bloomberg
Gold continued its downward trajectory on Monday, hovering around its lowest level since 2010, with expectations for further declines as the US central bank moves closer to hiking interest rates. The Fed will hold a policy meeting later this week, at which central bankers may provide more clues on a rate lift this year as the US economy continues to gain traction.
As gold prices declined, holding of the world's top gold-backed exchange-traded fund, the SPDR Gold Trust, dropped for a seventh day in a row on Friday to 21.87 million ounces, hitting the lowest level since September 2008.
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Durable Orders to recover
Since German Ifo Business Climate is already out, the remaining major driver for today's price changes is the US data. According to the forecasts, the orders or durable goods are expected to negate the previous 2.2% drop by jumping as much as 3.2% in June.Read More: Fundamental Analysis
XAU/USD to bounce off of 1,110
The outlook is strongly bearish towards the bullion, as right now we are consolidating just below the recently broken major trend-line. Moreover, most of the daily and monthly technical indicators are pointing south. The current ceiling is at 1,110, and it is reinforced by the monthly S3. The nearest significant demand area is supposed to be at 1,070, where the weekly S1 merges with the Bollinger band, but this is highly unlikely to stop the oncoming sell-off. Instead, the targets are the 2008 and 2010 lows at 1,032 and at 1,045, respectively.Daily chart
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Hourly chart
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Read More: Technical Analysis
Gold stays attractive
There is even less change in the distribution between the bulls and bears at OANDA and Saxo Bank. Almost 66% of OANDA traders are currently long the metal, while SAXO Bank's figures are a little closer to the SWFX data - 70%.
Spreads (avg,pip) / Trading volume / Volatility
Traders expect gold at 1,150 by the end of October
Traders, who were asked regarding their longer-term views on XAU/USD between Jun 24 and Jul 24 expect, on average, to see Gold trading just below 1,150 by the end of October. At the same time, 46% of them believe the bullion will be strongly above this mark in three months, while 39% of traders surveyed forecast the bullion to trade in the range between 1,000 and 1,150. © Dukascopy Bank SA