- Opened positions on Gold remain bullish (61% long / 39% short)
- The closest resistance for the yellow metal is currently located at 1,193
- At the same time, the closest support for the bullion is placed at 1,182
- Upcoming events on May 28: G7 Finance Ministers' Meeting (Day 2), US Unemployment Claims (May 22) and Pending Home Sales (Apr), UK Second Estimate GDP (Q1), Canada Current Account (Q1), Japan Household Spending (Apr) National CPI (Apr), Unemployment Rate (Apr) and Industrial Production (May)
© Dukascopy Bank SA
US core durable goods orders rose more than expected in April, increasing 0.5%, surpassing economists' median forecast for a 0.3% gain, and compared with an upwardly revised March figure of 0.6%. Meanwhile, total durable goods orders pulled down 0.5% in April, in line with expectation.
Meanwhile, US services sector activity slowed for the third consecutive month in May, with the headline indicator booking the lowest level since January. According to Markit, its preliminary services PMI declined to 56.4 in May, compared with the final reading of 57.4 in the previous month. The services sector is an important part of the US economy, as services account for more than 79% of the nation's private-sector GDP.
Watch More: Dukascopy TV
UK GDP growth projected to be revised upwards
According to the preliminary data, UK economy added just 0.3% in the first three months of 2015. However, tomorrow the second GDP estimate is due at 8:30 AM GMT, while analysts suggest that the expansion pace will be revised up to 0.4%. The indicator has most probably received additional boost from March fundamentals, which were not included in the first-estimate GDP calculation.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 1,120. 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 1,220 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
© Dukascopy Bank SA
After four consecutive days of sluggish changes, the precious metal slipped considerably on Tuesday, while pricing US fundamentals. The nearest support, represented by monthly PP, weekly S1 and 55-day SMA failed to help the bullion to reverse losses or limit them. Therefore, XAU/USD slumped as low as 1,187 by the end of the trading. The bullion is now required to return back above 1,194 in order to preserve any possibility of a rebound. Otherwise, the cross will come under major negative pressure, and bears will eventually target the April low at 1,169.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
SWFX opened positions on gold are positive
However, OANDA's bulls continue to enjoy the stable majority with 70.76% of all current positions. Gold's sentiment at OANDA is the third 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 are 65% of bullish trades registered by 5:30 AM on May 27.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 27 and May 27 expect, on average, to see Gold trading around 1,240 by the end of August. At the same time, 45% of them believe the bullion will be even strongly above 1,250 in three months, while 44% of traders surveyed forecast the bullion to trade in the range between 1,110 and 1,250.
© Dukascopy Bank SA