- Opened positions for Gold remain positive (68% bullish / 32% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,277
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,254
- Upcoming events on January 17-19: Eurozone Current Account (Nov), Switzerland Producer Price Index (Dec), Japan Industrial Production (Nov), China GDP (Q4), Industrial Production (Dec) and Retail Sales (Dec)
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Alongside, assets in SPDR Gold Trust soared the most since 2011. Holdings in the world's largest exchange-traded fund rose 1.4% to 717.15 metric tons on January 15, the biggest gain since August 2011. The assets fell 41% in 2013 and declined a further 11% last year as prices plunged. The precious metal gained 2.8% this week, extending a 2.9% advance a week earlier, as yesterday's global markets volatility caused by a shock of the SNB's move saw investors turned to gold, often seen as an alternative investment to riskier assets, to park their cash.
Moreover, US unemployment claims unexpectedly surged to the highest level in four months last week a slight setback for the labour market that has marked 2014 as the best year of job gains in more than a decade. The number of initial jobless claims jumped 19,000 to a seasonally adjusted 316,000 in the week ended January 10, the Labor Department reported. Economists had called for 290,000.
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Gold price to be influenced by data from outside US and Europe
Despite the fact that on Monday there will be lack of statistics from Europe and completely no data from the US due to Bank Holiday, commodity markets are likely to be driven by important data from Asia, and especially Japan and China. There two countries are going to publish numbers of industrial production for November and December, respectively. Moreover, China will reveal its economic growth pace in the last quarter of 2014, while markets predict a slowdown to 7.2% on the annual basis.Read More: Fundamental Analysis
XAU/USD keeps medium-term bullish momentum
The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend at $1,218 and started to develop above this line again on January 9. At the moment it is hard to say whether Gold is able to return back below this level in the foreseeable future. If the bullion consolidates above it, then we may see metal's further increase in the medium-term, with the goal at 2011 low at $1,307. Nevertheless, the long-term outlook for the yellow metal tends to remain negative, mostly reflecting strength of US fundamental factors and gradual recovery in Europe. Therefore, in February-March Gold is still suggested to lose value, which may follow the present rebound soon.Daily chart
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The yesterday's unexpected action of the SNB to decrease a deposit rate further to -0.75% and give up the franc's cap drove Gold considerably to the north. As traders were hedging from potential risks, the bullion climbed above the 50% Fibonacci retracement to close the day at $1,266, up more than $35 per ounce from the daily opening level. As a result of that, a number of major resistances were crossed, including monthly and weekly R1. For now we may observe some correction down to weekly R2 at $1,254. In the medium-term, both daily and weekly technical studies are now giving bullish signals.
Hourly chart
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Read More: Technical Analysis
Bullish majority on Gold deteriorates as traders fix profit
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Dec 16 and Jan 16 expect, on average, to see Gold trading around 1,230 by the end of April. At the same time, 48% of them believe the bullion will be above 1,250 in three months, while 23% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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