The metal keeps encountering resistance just above the 1,290 mark. However, throughout the week it can be observed that a range has been established. Most likely markets are expecting the outcome of the French presidential election. Moreover, the turmoil in Korean peninsula does not seem to be close to a solution. Meanwhile, from a technical perspective the yellow metal's price is still set to surge to the 1,300 mark.
US homebuilding activity dropped more than expected last month amid the unusually warm weather and weaker manufacturing activity, official figures revealed on Tuesday. The US Department of Commerce reported that housing starts fell 6.8% to a seasonally adjusted rate of 1.22M, as construction of single-family homes in the Midwest posted the largest decline since 2014. Meanwhile, market analysts anticipated a slighter drop to a 1.25M unit rate in March, following the preceding month's upwardly revised 1.30M unit rate. On an annual basis, housing starts were up 9.2%. Data also showed that building permits climbed to a 1.26M unit rate in March, compared to the previous month's upwardly revised 1.22M unit rate, whereas analysts expected a rise to 1.25M unit rate.
Upcoming events: US Crude Oil Inventories
Gold trades below 1,290 mark
On Wednesday morning the yellow metal's price was in a retreat just below the 1,290 mark, where the commodity price has been since the higher opening of Monday's trading session. During the second half of Tuesday's trading the bullion's surge was suddenly stopped by a market participant selling around 20,000 futures contracts. That forced the metal to retreat and find support in the 61.80% Fibonacci retracement level, which is located at the 1,278.73 level. It is most likely that this level will continue to provide support to the metal, as it is still expected that the bullion will reach the 1,300 mark.
Daily chart
Hourly chart
Markets remain neutral
Traders are bearish on the metal, as 55% of open positions are short. However, 64% of trader set up orders are to buy the bullion.
OANDA Gold traders are neutral regarding the metal, as open positions are 50.84% long on Wednesday, compared to 52.23% previously. Meanwhile, traders of SAXO bank remain neutral, as 51.85% of open positions are long, compared to 50.10% short positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of Gold being above 1,300 in July
Traders who were asked regarding their longer-term views on gold between March 19 and April 19 expect, on average, to see the metal near 1,300 in July. Generally, 52% (-1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 36% (+1%) of those surveyed reckon the currencies will trade in the range between 1,100 and 1,300 over the next three months.