The bullions recent moves were easy to forecast, as a strong support cluster keeps the rate from falling. However, on Wednesday that is about to change, as loads of fundamental data will affect the pricing of the yellow metal. At the forefront of the releases will be the Federal Reserve and the FOMC Statement with the Federal Funds Rate announcement.
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 continues lower
The yellow metal's price is fluctuating, as forecasted. The metal hit the support cluster below it near the 1,252 level and made a slight rebound. On Wednesday morning the metal traded above the support cluster, which is made up of the 55 and 200-day SMAs, the weekly S2, the lower trend line of a medium scale descending channel and the 50.00% Fibonacci retracement level. All of these levels of significance make the 1,250 mark a strong foundation for the bullion. Due to that it is even unlikely that the will pass this support soon.
Daily chart
Hourly chart
Bulls show dominance
SWFX market sentiment remains unchanged, as 52% of open positions are short, and 67% of trader set up orders are to buy.
OANDA Gold traders are bullish regarding the metal, as open positions are 59.81% long on Wednesday, compared to 61.08% previously. Meanwhile, traders of SAXO bank are also bullish, as 64.46% of open positions are long, compared to 64.93% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being below 1,350 in early August
Traders who were asked regarding their longer-term views on gold between April 3 and May 3 expect, on average, to see the metal near 1,350 in early August. Generally, 64% (+1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 32% of those surveyed reckon the metal will trade in the range between 1,100 and 1,300 over the next three months.