- Opened positions for Gold remain positive with a confident majority of bullish trades (70% bullish / 30% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,278
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,263
- Upcoming events on February 6: Germany Industrial Production (Dec), France Budget Balance (Dec) and Trade Balance (Dec), US Non-Farm Payrolls (Jan) and Unemployment Rate (Jan), Switzerland Foreign Currency Reserves (Jan) and Retail Sales (Dec), UK Trade Balance (Dec), Canada Unemployment Rate (Jan)
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Gold rose yesterday as Greece has lost its critical source of funding as the ECB restricted loans to the country's financial system, while the People's Bank of China joined easing trend. Beijing cut its reserve requirement for banks in an attempt to provide more liquidity to combat economic slowdown and imminent deflation threat. Both moves supported the precious metal, while investors are awaiting the US non-farm employment data due on Friday.
US private companies created more than 200,000 jobs in January for a fifth straight month, adding to signs of sustainable labour market growth. According to ADP report, private sector employment rose 213,000 jobs in January, after the 253,000 increase a month earlier and shy of forecasts for 220,000 new positions.
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US payrolls to reveal continuous improvement of labour market
On Friday of this week, economists are expecting to receive important numbers on US labour market which continues to create more than 200,000 jobs per month. Tomorrow, employment data for January will be announced, followed by the jobless rate figure in the world's largest economy. Among other potentially important Gold drivers, the Swiss National Bank will reveal the total amount of foreign currency reserves for January, the indicator which is closely watched after surprising decision of the regulator to abandon Franc's peg to the Euro.Read More: Fundamental Analysis
XAU/USD keeps medium-term bullish momentum
The XAU/USD cross has breached the most important resistance line on January 3, which is represented by the long-term downtrend at $1,218. Consequently, it started to develop above this level to hit $1,300 mark already on January 21. At the moment, it seems unlikely for Gold to be able to return back below $1,200 in the foreseeable future. Moreover, if the bullion manages to remain above $1,250, then we may see metal's further increase in the medium-term. Nevertheless, the long-term outlook for the yellow metal tends to remain negative, mostly reflecting strength of US fundamental factors and gradual recovery in Europe. Therefore, in towards the end of Q1 2015 gold is still suggested to lose value.Daily chart
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XAU/USD decided to postpone the idea of penetrating a cluster of support levels around $1,260. As a result, the bullion managed to gain some bullish momentum and increase in value over trading on Wednesday. Currently it is hovering around the long-term downtrend line at $1,270, also showing no major intentions to make any precipitous movements. Moreover, neutral sentiment for the precious metal is shared by daily and weekly technical indicators, while in the long-term they forecast Gold to try going below $1,260.
Hourly chart
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SWFX opened trades on Gold keep staying volatile
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jan 5 and Feb 5 expect, on average, to see Gold trading around 1,310 by the end of May. At the same time, 56% of them believe the bullion will be strongly above this mark in three months, while 30% of traders surveyed forecast the bullion to trade in the range between 1,150 and 1,300.
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