- Opened positions on gold are bullish (68% long / 32% short)
- The closest resistance for the yellow metal is currently located at 1,177
- At the same time, the closest support for the bullion is placed at 1,164
- Upcoming events on June 8: Germany Trade Balance (Apr), G7 Summit, Japan GDP (Q1), China Trade Balance (May), Canada Housing Starts (May)
© Dukascopy Bank SA
The number of Americans, who sought unemployment benefits last week, dropped, a sign that job cuts stay low as employers remain confident enough in the business outlook to keep their personnel. Initial claims for unemployment benefits, a measure of layoffs across the US, declined 8,000 to a seasonally adjusted 276,000 in the week ended May 30, the Labor Department reported. As for claimants who already receive government support, the figure for the week ending May 16, came in at 2.196 million, compared to the revised 2.226 million seen previously.
Meanwhile, a separate report showed US non-farm productivity fell more steeply than initially estimated in the first quarter, leading to an increase in labour-related production costs, a trend that could fuel inflation if sustained. Productivity dropped at a 3.1% annual rate instead of the previously reported 1.9% pace, the Labor Department said. That was the first back-to-back decline in productivity since 2006.
Watch More: Dukascopy TV
Japan to revise GDP numbers for January-March
Monday of the next week will be dominated by statistical data releases from outside Europe or the United States. Japan is going to publish the final first-quarter GDP data in the night between Sunday and Monday, as this data is due at 11:50 PM GMT on Sunday. Following that, China will announce international trade numbers, with this data expected in course of the first working day of the June 8-12 working week.Read More: Fundamental Analysis
XAU/USD develops inside bearish wedge pattern on daily chart
Since the second quarter of 2013, the bullion has been developing inside the falling wedge pattern, meaning that trading range is decreasing as time goes on. Two pattern's boundaries are represented by the upper trend-line around 1,270 and pattern's support at 1,115. Among recent developments, in March 2015 the yellow metal resumed gaining value, even without touching the lower trend-line. In the foreseeable future gains are likely to be limited and the bullion should be driven by the 200-day SMA around 1,210 with a slight bearish bias. Some short-term gains in the direction of the long-term downtrend (1,270) are not completely off the table, but bears are eventually going to overtake a lead and drive the metal back to the south. The overall negative tendency for Gold seems to be the case in the long run, while at the end of this year the precious metal should to consolidate around 1,150, in case the present trend persists.Daily chart
© Dukascopy Bank SA
Bullion bears decided to push the price below 1,180 on Thursday; therefore, the precious metal hit its lowest level in more than 30 calendar days at 1,173. As a result, the immediate support, which is represented by the weekly S1 at 1,177, has been erased and now the focus is on the next demand at 1,164. However, the intermediate target is located at 1,170 (April low). In addition to that, technical indicators on all time frames are now suggesting gold will plummet further.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
SWFX long opened positions on gold approach 70%
Meanwhile, OANDA's bulls are in the safe majority with 73.64% (+3%) of all current positions. Gold's sentiment at OANDA is the second most positive among all major currency pairs at the moment. Saxo Bank market participants are also optimistic with respect to the precious metal, as there were 70% of bullish trades registered by 5:30 AM GMT on June 5.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 5 and June 5 expect, on average, to see Gold trading around 1,225 by the end of September. At the same time, 59% of them believe the bullion will be even strongly above 1,200 in three months, while 26% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA