- Opened positions on Gold remain positive with a slight majority of bullish trades (55% bullish / 45% bearish)
- The closest resistance for the yellow metal is currently located at 1,207
- At the same time, the closest support for the bullion is placed at 1,195
- Upcoming events on March 6: Germany Industrial Production (Jan), France Budget Balance (Jan) and Trade Balance (Jan), Euro zone GDP (Q4), US Non-Farm Payrolls (Feb), Unemployment Rate (Feb) and Trade Balance (Jan), Switzerland Unemployment Rate (Feb) and CPI (Feb)
Gold rose above $1,200 an ounce on Thursday following a three-day losing streak as equities fell. However, gains were limited by positive US fundamentals as well as strong Greenback. An improving economy diminishes the lure of gold, often seen as an alternative investment during times of economic and geopolitical turmoil. A stronger Dollar makes gold also less appealing, as it becomes more expensive for holders of other currencies. Moreover, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, reported a decline in holdings to the lowest level in a month earlier this week, after posting its biggest one-day outflow this year.
Meanwhile, US private employers added more than 200,000 workers to payrolls in February for the 13th consecutive month, in a latest sign that strong hiring should underpin the world's number one economy this year. According to the payroll processor ADP, US companies created 212,000 jobs last month, recording a solid gain, but missing expectations for a 219,000 new jobs and following 250,000 jobs in January.
US trade balance projected to improve in January after weak preceding month
Trade balance in the United States is estimated to show an improvement for the month of January. It may follow a considerable deterioration posted in the end of last year when stronger US Dollar contributed to trade deficit going up to $46.56 billion. Along with that, US statistical authorities are releasing the labour market data, including employment change and jobless rate for February.XAU/USD develops inside bearish channel on daily chart
On January 22, the level at 1,300 which acted as a strong supply for Gold forced the yellow metal to resume declining. Moreover, the bullion succeeded in consolidating below 1,250 during the second week of February, following a day of considerable decline in price on February 6. Taking into account strength of US fundamental factors and potential positive effects from the expanded asset purchases programme in the Eurozone, the long-term outlook for Gold is remaining fairly bearish. Even though some medium-term bullishness can be created by a major level at 1,200, the precious metal is likely to develop below this level in course of March. Moreover, in case of consolidation below the 2013 low at 1,180, a drop down to 2014 low at 1,130 will be broadly expected to take place toward the end of April.Daily chart
XAU/USD cross showed no significant changes in course of the previous trading day as it remained hovering just around the major level of 1,200. The closest resistance and support are located at 1,207 and 1,195, respectively and provide two boundaries for Gold in a rather wide trading range. Therefore, without impetus a move beyond any of these lines will be difficult to achieve. According to technical studies on a daily chart, a decline is more likely than an advance today, even though on a weekly basis an increase in the bullion's value is still more preferable.
Hourly chart
SWFX opened positions stay slightly positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 69% at the moment, down one and a half percentage points in course of past 24 hours. As a result, Gold's sentiment is currently the fourth most positive among major currency pairs at OANDA. In addition, SaxoGroup market participants are also optimistic with respect to the yellow metal, as there are 61% of bullish positions registered by 6:45 GMT today, down three percentage points from Wednesday.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 5 and Mar 5 expect, on average, to see Gold trading at 1,250 by the end of June. At the same time, 53% of them still believe the bullion will be strongly above this mark in three months, while 27% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.