The bullion continues on its path lower in the strong and many times confirmed descending channel pattern. Due to the fact that until tomorrow there are no notable fundamental events set to occur, it is most likely set to continue on its path lower.
The Purchasing Managers' Index for the US manufacturing sector grew less than analysts estimated. According to the Institute for Supply Management, the PMI lost 2.4% compared to the previous month and tumbled to 54.8%, while experts anticipated only a slight decrease of 0.6%. Although in April the PMI rose at the slowest pace this year so far, it still remained above the 12-month average of 53.6%. The ISM report showed that the New Orders, Employment and Supplier Deliveries Indices dropped 7.0%, 6.9% and 0.8%, accordingly. Meanwhile, both Inventories and Prices Indices posted a 2% advance, which indicated that manufacturing companies stockpiled more raw materials than in the previous month and their costs increased.
Upcoming events: FOMC
Gold approaches 1,250 mark
The yellow metal continued on its path lower on Tuesday morning, as the metal's price was about to reach a strong support cluster near the 1,250 mark. The support cluster is most likely going to pause the decline of the bullion's price. The cluster is made up of the 55 and 200-day SMAs together with the weekly S2 and the 50.00% Fibonacci retracement level. If the metal rebounds it would most likely surge up to the weekly S1, which is located at the 1,260.48 level. On the other hand the upcoming last round of French election can still cause fundamental shifts.
Daily chart
Hourly chart
Bulls show dominance
Traders remain bearish on the metal, as 52% of open positions are short on Tuesday. However, 67% of set up orders are to buy.
OANDA Gold traders are bullish regarding the metal, as open positions are 61.08% long on Tuesday, compared to 61.59% previously. Meanwhile, traders of SAXO bank are also bullish, as 64.93% of open positions are long, compared to 64.00% positions on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being above 1,315 in early August
Traders who were asked regarding their longer-term views on gold between April 2 and May 2 expect, on average, to see the metal near 1,315 in early August. Generally, 63% (+1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 32% (-1%) of those surveyed reckon the metal will trade in the range between 1,100 and 1,300 over the next three months.