The yellow metal has extended its decline more than it was expected. It is quite possible that the bullion will reach for the support cluster near the 1,250 mark. Such a hypothesis is made after evaluating all of the technical aspects of the commodity price, where the main argument is that the metal's price lacks support on Wednesday morning.
The US economy expanded at a stronger-than-initially expected pace in the March quarter; however, an economic slowdown remained on the table in the second quarter. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualized pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months.
Minor US data
Gold is set to decline
Seems like the yellow metal is set to lose more value than it was previously though. On Wednesday morning the bullion managed to fall and traded below the weekly PP, which is located at the 1,261.80 mark and was set to provide support to the commodity price. Due to the fact that this level of significance has been passed from a technical analysis perspective it can be expected that the weekly S1 and the 55-day SMA are the next support levels to be reached. The just mentioned support levels are located, respectively, at 1,253.91 and 1,254.25 levels.
Daily chart
Hourly chart
Bulls establish dominance
SWFX traders remain almost neutral, as 51% of open positions are long. Meanwhile, only 59% of set up orders are to buy the metal, compared to 66% of pending commands previously.
OANDA Gold traders remain bullish, as open positions are 64.29% long on Wednesday, compared to 65.05% previously. Meanwhile, traders of SAXO bank are once more almost neutral, as 53.57% of open positions are long, compared to 52.88% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being near 1,350 by September
Traders who were asked regarding their longer-term views on gold between April 31 and May 31 expect, on average, to see the metal just below 1,350 by September. Generally, 44% (-1%) of participants believe the price will be above 1,350 in ninety days. Meanwhile, 34% of those surveyed reckon the metal will trade in the range between 1,250 and 1,350 over the next three months.