- Opened positions on gold are strongly bullish (73% long / 27% short)
- The closest resistance for the yellow metal is currently located at 1,179
- At the same time, the closest support for the bullion is placed at 1,162
- Upcoming events on June 11: US Unemployment Claims (Jun 5) and Retail Sales (May), Australia Employment Change and Unemployment Rate (May), China Industrial Production and Retail Sales (May)
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However, gold prices have already dropped on Wednesday, with investors' attention turning to Greece and its readiness to strike a deal with its international creditors to ensure sovereign debt payments at the end of June. Reform proposals from both Greece and its creditors continue to go against both parties' expectations and demands. A planned meeting between German, French and Greek leaders on Wednesday now looks in doubt as a new reform plan presented by Greece a day earlier in order to unlock new funding, fell short of creditor demands.
Meanwhile, China's consumer inflation declined in May, while factory prices slumped under pressure from a slowing economy, fuelling concerns about deflationary pressure in the world's second-biggest economy. China's consumer-price index climbed 1.2% in the reported month from a year earlier, slower than the annual 1.5% increase in April, according to the National Bureau of Statistics.
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Chinese manufacturing data to be in focus on Thursday
Industrial production and retail sales statistics from China is expected to be published at 5:30 AM GMT on Thursday. Both of these indicators are estimated to rebound slightly, up to 6.0% and 10.1% on the annual basis, respectively. However, the numbers are not considered to be strong enough in order to show that the second-biggest global economy is regaining positive economic momentum.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
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Weaker US Dollar contributed to an increase of the bullion's price on Tuesday, as the yellow metal continued to rebound from its three-month lows. As a result, the process of nearing the weekly pivot point at 1,179 became inevitable, and gold is currently cautiously testing this resistance. Any negative impetus may push the metal back to the downside, especially taking into consideration a broad bearish support from the technical indicators. However, in case of the weekly PP's violation, bulls will refocus their attention on the 20-day SMA at 1,188.
Hourly chart
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SWFX long opened positions on gold consolidate above 70%
Meanwhile, OANDA's bulls are in the safe majority with 73.66% 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 63% of bullish trades registered by 5:30 AM GMT on June 10.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 10 and June 10 expect, on average, to see Gold trading around 1,230 by the end of September. At the same time, 62% of them believe the bullion will be even strongly above 1,200 in three months, while 25% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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