- Opened positions on Gold remain positive (68% bullish / 32% bearish)
- The closest resistance for the yellow metal is currently located at 1,173
- At the same time, the closest support for the bullion is placed at 1,151
- Upcoming events on March 13: Italy CPI (Feb), US Producer Price Index (Feb) and Reuters/Michigan Consumer Sentiment Index (Mar), Japan Industrial Production (Jan), Canada Employment Change (Feb) and Unemployment Rate (Jan)
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Gold's selloff accelerated, as the precious metal's prices declined more than 1%, hitting the lowest level in more than three months. Bullion was dragged down by a strong US Dollar, which benefitted from the launch of the ECB's sovereign debt purchases as well as soft UK'S and China's fundamentals. On top of that, Fed's policy makers hinted that the central bank might soon end its near-zero policy.
Richard Fisher, President of the Dallas Federal Reserve Bank, said earlier this week the Fed should promptly end its easy money policy and go ahead with an interest rate increase, followed by a set of gradual moves higher. Risk of earlier rate-hike undermines demand for non-interest-bearing bullion, pushing its prices lower.
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Labour market data from Canada to be watched on Friday
On March 13, Canada is releasing some important statistics that will be mostly connected with country's labour market. According to average market expectations, employment has probably decreased by 5,000 in February after strong gains of 35,400 a month before, while the jobless rate is likely to increase to 6.7%.Read More: Fundamental Analysis
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 1,200 during the first week of March, following a period of considerable losses. 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 the 2014 low around 1,130, the precious metal is likely to develop below this level in course March-April time period. Moreover, in case of consolidation below this mark, a drop down to 2010 low at 1,044 will be broadly expected to take place towards the end of May.Daily chart
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On Wednesday, Gold declined for an eight day in a row and traded near three-month lows. It seems that this week the bullion is following a trend of the Bollinger band which has a sharp downward slope at the moment. Currently, this line is also supported by the weekly S1 at 1,146 which is likely to prevent additional sell-offs for some period of time. Therefore, Gold is expected to commence a short-term recovery at the end of this week. Meanwhile, in case of a drop for ninth consecutive day, it would mark the longest streak of losses in 17 years.
Hourly chart
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Read More: Technical Analysis
SWFX opened positions remain positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 68.54% at the moment, thus giving a slight decrease from yesterday. As a result, Gold's sentiment is currently the third most positive among major currency pairs at OANDA. In addition, SaxoGroup market participants are also positive with respect to the yellow metal, as there are 65% of bullish positions registered by 6:30 GMT on March 12, 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 12 and Mar 12 expect, on average, to see Gold trading just above 1,200 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 29% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA