On Friday the yellow metal was regaining its losses, which were suffered on Thursday. Various clues were indicating that the bullion will regain all of its losses. The main reason for that is not just the strong support levels, which are located below the yellow metal's price but also the fact that there are almost no notable resistance levels up to the 1,261.72 level.
The number of Americans filing for unemployment benefits dropped unexpectedly last month, official figures revealed on Thursday. The US Department of Labour reported that initial jobless claims fell to 232K in the week ending May 12, following the preceding week's 236K and posting the third consecutive decline. In the meantime, analysts held expectations for an increase to 240K. Claims remained below the 300K level for 115 straight weeks, the longest stretch since 1973.
Upcoming events: As good as nothing
Gold finds support below 1,250
On Friday morning the yellow metal's price was regaining some of the losses, which were suffered during Thursday's trading session. During that day the bullion retreated down to the levels below the 1,250 mark, where the 20, 55 and 200-day SMAs are located at. The combined support of these levels of significance managed to stop the fall of the commodiy price. Afterwards a rebound began, which has passed the resistance of the 50.00% Fibonacci retracement level at 1,249.16 level. Due to these factors combined it can be assumed that the bullion will attempt to reach the weekly R3 at 1,261.72 once more.
Daily chart
Hourly chart
Bulls dominate
Traders are neutral in regard to the metal. However, 70% of pending commands are to buy the bullion.
OANDA Gold traders have increased their bullish outlook, as open positions are 69.95% long on Friday, compared to 66.86% previously. Meanwhile, traders of SAXO bank have done the same, as 55.77% of open positions are long, compared to 53.62% positions on Thursday.
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 19 and May 19 expect, on average, to see the metal near 1,350 in August. Generally, 51% (+3%) 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.