- Opened positions on gold are strongly bullish (64% long / 36% short)
- The closest resistance for the yellow metal is currently located at 1,204
- At the same time, the closest support for the bullion is placed at 1,198
- Upcoming events on June 22: US Existing Home Sales (May)
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Gold headed for the second weekly gain, supported by the Fed's caution over interest rates hike and weaker US Dollar. The precious metal also enjoyed some support from the ongoing Greek crisis. Greece's government and its international creditors remain at a standstill over a debt deal. Euro zone leaders will hold an emergency summit on Monday in another attempt to avert a Greek default after bank withdrawals increased sharply and government revenue dropped. The ECB will also hold an emergency meeting of its governing council later today to discuss the deteriorating situation for Greek banks.
Among fundamentals, the Swiss National Bank kept intact its policy of negative interest rates and penalties for holding Swiss francs in cash. The central bank anticipates that negative interest rates will dampen the value of the Swiss Franc over time, the SNB Chairman Thomas Jordan said. In addition to that, the central bank also said that it would remain active in currency markets to suppress Switzerland's currency.
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US housing data to improve in May
On Monday, the most important fundamental data release will cover the existing home sales in the US for the month of May. The annualized sales' indicator is expected to advance from 5.04 million in April up to 5.25 million last month and will be published at 12:30 PM GMT. Existing home sales are considered as an important indicator of the property market's health, and they usually affect other sectors of the economy, including mortgage financing, construction and brokerage of executing the transactions.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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XAU/USD benefited significantly from the fundamental statistics in the US on Thursday, and several resistances failed to provide sufficient opposition to bulls. Among them, the monthly pivot point and 100-day SMA were violated to the north, while these levels are also accompanied by the 55-day SMA and weekly R1. The only help for bears came from the next supply zone around 1,205 (23.6% Fibo, 200-day SMA, weekly R2), and these technical levels are capable of launching a correction phase in the near-term.
Hourly chart
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SWFX long open positions narrow advantage
Meanwhile, OANDA's bulls are in the safe majority with 66% (-5%) 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 were 55% (-6%) of bullish trades registered by 5:30 AM GMT on June 19.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 19 and Jun 19 expect, on average, to see Gold trading around 1,195 by the end of September. At the same time, 54% of them believe the bullion will be above 1,200 in three months, while 30% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
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