As it was expected, the bullion found support in the lower trend line of a medium term ascending channel pattern, which is a sign of an upcoming surge. Although, there are various mixed signals form the technical charts, which indicate that the surge might be postponed, as the metal was heading back to the trend line after encountering strong resistance during the session.
US manufacturing activity in the Mid-Atlantic region slowed markedly in April, official figures revealed on Thursday. The Philadelphia Federal Reserve reported its Manufacturing Index dropped to 22.0 in the reported month, following March's reading of 32.8 and falling behind analysts' expectations for a decrease to 25.6 points. Analysts stated that business optimism prompted by Donald Trump's win in the presidential election started to fade, putting downward pressure on business activity.
Upcoming events: CB Consumer Confidence and New Home Sales
Gold finds support
During the early hours of Tuesday's trading session the yellow metal's price declined. However, the bullion had found and revealed the proper borders of a medium term ascending channel pattern during Monday's trading. The lower trend line of the pattern provided support for a rebound of the metal, and it continued to support the bullion on Tuesday. It is highly possible that the trend line will push the commodity price through the resistance levels, which it faces from 1,274 to 1,278. On the other hand, if the support is passed, the bullion could fall to the weekly S2, which is located at 1,263.56.
Daily chart
Hourly chart
Bulls show dominance
SWFX sentiment remains almost unchanged, as 56% of open positions are short, and 63% of set up orders are to buy the bullion.
OANDA Gold traders are bullish regarding the metal, as open positions are 56.03% long on Tuesday, compared to 56.60% previously. Meanwhile, traders of SAXO bank are also bullish, as 53.52% of open positions are long, compared to 54.93% positions on Monday.
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 25 and April 25 expect, on average, to see the metal near 1,300 in July. Generally, 55% (+3%) of participants believe the price will be above 1,300 in ninety days. Alongside, 34% (-3%) of those surveyed reckon the currencies will trade in the range between 1,100 and 1,300 over the next three months.