The bullion continues on its path higher, as the metal's price is approaching the 1,250 mark. If the strong resistance at that level is passed, the commodity price might suddenly jump to the third weekly resistance, which is located at the 1,261.72 level. The reason for that would be the fact that there are no other levels of significance in the way of the metal after the 1,250 mark.
US homebuilding activity dropped in April; however, revisions of the preceding month's readings suggested that homebuilding activity continued improving. The Census Bureau reported on Tuesday that housing starts declined 2.6% to a seasonally adjusted annual pace of 1.17M units last month, following March's upwardly revised 1.28M-unit pace and falling behind expectations for a 3.7% rise to a 1.26M-unit pace.
Upcoming events: Only crude oil
XAU/USD stretches further up
The XAU/USD cross has been recovering since it touched the broadening rising wedge's support line one week ago. Gold has little room left before it could be forced to make a potential U-turn, as there is a substantial resistance cluster located around 1,246.50, formed by the monthly S1, the weekly R2, the 20, 55 and 200-day SMAs. A successful breach of this resistance is likely to allow the yellow metal to keep appreciating until the 10-month down-trend could be reached. Assuming this down-trend is overcome, the metal would have the potential to approach the wedge's resistance, but that all depends on this week's performance.
Daily chart
Hourly chart
Bulls dominate
Today 54% of all open positions are long (previously 52%), whereas 66% of all pending orders are to buy the gold.
OANDA Gold traders remain bullish, as open positions are 76.06% long on Wednesday, compared to 76.23% previously. Meanwhile, traders of SAXO bank have a less positive outlook, as 59.39% of open positions are long, compared to 65.74% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being below 1,350 in August
Traders who were asked regarding their longer-term views on gold between April 17 and May 17 expect, on average, to see the metal near 1,350 in August. Generally, 50% of participants believe the price will be above 1,350 in ninety days. Alongside, 35% of those surveyed reckon the metal will trade in the range between 1,200 and 1,350 over the next three months.