- Opened positions on gold are strongly bullish (71% long / 29% short)
- The closest resistance for the yellow metal is currently located at 1,187
- At the same time, the closest support for the bullion is placed at 1,180
- Upcoming events on June 17: Italy Trade Balance (Apr), Euro zone CPI (May), Germany 10-y Bond Auction, Fed Interest Rate Decision and Monetary Policy Statement, UK Claimant Count Change (May) and Unemployment Rate (3M-Apr), BoE Monetary Policy Meeting Minutes, New Zealand GDP (Q1), Canada Wholesale Sales (Apr)
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Gold traded firmly near $1,185 an ounce on Tuesday amid safe-haven bids triggered by Greece's failure to strike a deal with its international creditors. The precious metal also received support from soft US economic data. US data showed softness in industrial production, contrasting with recent encouraging data on retail sales, employment, consumer and small business confidence. Investors will be closely monitoring comments from the Fed chair Janet Yellen on Wednesday for hints on when the US central bank could hike interest rates, which are currently near record lows.
Meanwhile, the factory survey in the New York area showed that activity in the manufacturing sector deteriorated in June. The Empire State Manufacturing Index calculated by the Federal Reserve Bank of New York fell to the negative territory this month, down from 3.1 points in May to –2.0 points this month. However, the majority of analysts surveyed were looking for a rise up to 6 points in the reporting month.
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FOMC statement, BoE minutes and New Zealand GDP are in focus tomorrow
Wednesday of this week will be one of the busiest days this week, also in terms of importance of the fundamental data that is going to be published. Among the news, the most of attention will be paid to the FOMC statement at 18:00 PM GMT, where markets are waiting for the signals of the interest rate's hike. Meanwhile, the UK labour market data will be released along with the Bank of England's monetary policy meeting minutes at 8:30 AM GMT.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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By receiving reliable support from the 2013 low and weekly PP at 1,180 the bullion managed to accumulate daily gains on Monday, even though it firstly attempted to decline as low as 1,173. In case the metal consolidates well above the current trading levels, it will be in a position to jump up to 1,195 (55-day SMA) in the near-term. However, XAU/USD will meet a considerable resistance there, which is composed of the 100-day SMA and monthly PP around 1,197. Therefore, any medium-term gains are unlikely and the risk of a downside movement has not been eliminated yet.
Hourly chart
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SWFX long opened positions on gold above 70%
Meanwhile, OANDA's bulls are in the safe majority with 73% 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 61% of bullish trades registered by 5:30 AM GMT on June 16.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 16 and Jun 16 expect, on average, to see Gold trading around 1,200 by the end of September. At the same time, 52% of them believe the bullion will be even strongly above this level in three months, while 28% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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