- Opened positions on Gold remain positive (75% bullish / 25% bearish)
- The closest resistance for the yellow metal is currently located at 1,160
- At the same time, the closest support for the bullion is placed at 1,145
- Upcoming events on March 19: US Unemployment Claims (Mar 13) and Philadelphia Fed Manufacturing Survey (Mar), Switzerland Trade Balance (Feb), Swiss National Bank Interest Rate Decision, ECB Ecoomic Bulletin and Targeted LTRO
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Gold stayed near the lowest level in three months ahead of the conclusion of the Fed's two-day policy meeting today that may fuel expectations for a mid-year interest rate hike. Investors remained cautious, anticipating the Fed policy makers to strike the word "patient" off the forward guidance on interest rates. If that is the case, this would pave the way for a possible rate increase in June, the first since 2006, thus hurting further a non-interest bearing gold. Meanwhile, SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, saw its holdings declining 0.4% to 747.98 tonnes on Tuesday.
US housing starts plummeted in February by the most in four years as extreme weather forced American construction companies to cut down on the number of building sites. Ground-breaking tumbled 17% to a seasonally adjusted annual rate of 897,000 units, recording the lowest level since January 2014, according to the Commerce Department.
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ECB to hold next round of TLTROs, SNB announces rate on Thursday
Despite launching the quantitative easing programme earlier this year, the European Central Bank is still going to offer Euro zone's banks cheap money by holding a number of rounds of long-term refinancing operations. The regulator intends to expand its balance sheet by one trillion euros by the end of this year, and this number does not include the upcoming QE. Besides that, the Swiss National Bank is probably going to keep its main interest rate unchanged at the negative level of -0.75%.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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XAU/USD cross remains trading in the vicinity of two major technical levels that are located at 1,160 and 1,145, correspondingly. Still, Gold remained under increased bearish pressure back on Tuesday as short traders attempted to push the bullion below the weekly S1. However, a failure to do so resulted in a bounce back towards the 1,150 mark. Judging from technical indicators, the precious metal will continue developing downwards, but a fall below 1,134 (monthly S2) is highly unlikely to happen in the short-term.
Hourly chart
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SWFX opened positions remain positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 69.68% at the moment, giving a slight increase over last trading day. As a result, Gold's sentiment is currently the second 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 63% of bullish positions registered by 6:30 GMT on March 18.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 18 and Mar 18 expect, on average, to see Gold trading around 1,200 by the end of June. At the same time, 50% of them still believe the bullion will be strongly above this mark in three months, while 31% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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