Gold: market closed after more losses on Thursday

Note: This section contains information in English only.
Source: Dukascopy Bank SA
  • Bullish SWFX market share stabilized at 42% before Easter weekend
  • Market is closed until Monday; however, gold price will be equally exposed to both bullish and bearish risks when trading reopens
  • Weekly technical indicators are overwhelmingly positive on gold and expect a recovery next week
  • Economic events to watch over the next 24 hours: French GDP (Q4); US Final GDP (Q4)

© Dukascopy Bank SA
Commodity market registered a mixed development on March 24, but the majority of components included in Dukascopy daily review kept declining amid broadly uplifted US Dollar. Oil prices lost up to one percent on Thursday, following pessimistic inventory data released back on Wednesday. It had revealed that stockpiles surged much more than estimated for the week ended March 18. This is adding to speculations that supply competition continues, as oil producers are not willing to cut production even in the wake of recent downturns in prices. At the moment of writing of this report, Crude oil has traded near $39.50 per barrel, while Brent has kept hovering above $40. Meanwhile, market participants decided to shun gold and other precious metals, following another round of hawkish comments made by Federal Reserve's officials. They raised attractiveness of the Buck and more riskier assets.

Japan's consumer inflation remained flat in the year to February as low energy costs and weak consumption restrained price growth, keeping the Bank of Japan under pressure to introduce additional stimulus even after easing policy less than two months ago. A separate BoJ index, which strips out the effects of energy and fresh food prices, showed consumer inflation at 1.1% in the year to February, unchanged from January. Core consumer prices in Tokyo, a leading indicator of nationwide prices, recorded the biggest annual decline in nearly three years in March, suggesting that inflation will remain tepid amid weak demand as the world's third-largest economy stands on the edge of recession. The core CPI for the Tokyo metropolitan area slid 0.3% in March, after declining 0.1% in February. The data reinforces a dominant market opinion that the central bank will be forced to cut its inflation forecasts and push back the timing for reaching its 2% price target at a quarterly review of its projections next month. When the BoJ launched its massive asset-buying programme in April 2013, it pledged to achieve 2% in roughly two years. With inflation remaining benign three years into the commitment, the central bank has repeatedly postponed the timeframe for hitting its inflation goal, including at its January meeting.


Sales of newly built single-family homes recovered modestly in February as a rise in the West offset steep declines in other regions, suggesting the housing sector has been recovering gradually amid a limited property supply on the market. The Commerce Department reported home sales increased 2.0% to a seasonally adjusted annual rate of 512,000 units. Moreover, January's figure was revised up to 502,000 units from the previously reported 494,000 units. New single-family home sales were supported by a sturdy 38,5% advance in the West last month, which reversed January's 32.7% plunge. However, excluding the West, home sales declined 8.1%. New home sales account for about 9.2% of the housing market. The median price of a new home stood at $301,400 last month, up 2.6% from a year earlier. Other signs indicate slow gains in the housing market. Sales of existing homes, roughly 90% of all home purchases, plunged 7.1% in February from January, the National Association of Realtors reported this week, but they rose 2.2% from the prior year. With the improving labour market boosting household formation and mortgage rates still low by historical standards, housing fundamentals remain strong. The sector is expected to continue to contribute to economic growth this year.

Watch More: Dukascopy TV



Gold: market closed after more losses on Thursday

Bearish market participants continued to push gold prices to the downside on Thursday. At the same time, scope of the selloff is nowhere near a plunge we had observed one day prior to that. Basically, the bullion is set to hover in limbo after the commodity market returns back to trading on Monday. This is because the closest resistance lies at 1,227 (23.6% retracement of Dec-Mar uptrend) and the nearest support is the 1,205 mark (monthly PP), while Thursday trading closed somewhere is between at 1,216. Important signal: next week's technical indicators switched to a "strong buy" mode.

Daily chart
© Dukascopy Bank SA

Notwithstanding a moderate drop in prices yesterday, the spot managed to contain this decline by the Feb 26 low at 1,211. Additional demand is offered by the Feb 22 low at 1,201. Unless they are penetrated, our short-term neutral outlook will not be abandoned. Adding to that, it should be pointed out that the 200-hour SMA (1,240) will begin putting more negative pressure on gold soon.

Hourly chart
© Dukascopy Bank SA

Bullish market share stays at weekly high

SWFX traders have taken a break on Thursday, as before a long holiday weekend they refrained from changing preferences with respect to gold. At the moment about 42% of all trades are bullish, which is still the highest level of the past seven working days. The bears are therefore keeping a 58% portion of the market.

Pretty much the same situation is being observed in both OANDA and SAXO Bank markets, where clients are still bullish on the yellow metal in 57-59% of all cases this Friday morning. When the session reopens next Monday, the likelihood of more turbulence, even in terms of open positions, will definitely increase.














Spreads (avg,pip) / Trading volume / Volatility


Market participants foresee the price of gold much higher at 1,330 by the end of June

Traders who were asked regarding their longer-term views on gold between Feb 25 and Mar 25 expect, on average, to see the metal around 1,330 by the end of June 2016, up considerably from 1,280 yesterday. Generally, 64% (-2%) of participants believe the price will be generally above 1,300 in ninety days. Alongside, only 22% of those surveyed reckon the price will trade in the range between 1,150 and 1,300 over the next three months.

© Dukascopy Bank SA

Actual Topics

Subscribe to "Fundamental Analysis" feed

Subscribe
Aby dowiedzieć się więcej o handlu Forex/CFD na platformie Dukascopy Banku, rynku SWFX oraz innych rzeczy związanych z handlem,
zadzwoń do nas lub poproś o oddzwonienie.
For further information regarding potential cooperation,
please call us or make callback request.
Aby dowiedzieć się więcej o Opcjach Binarnych w Banku Dukascopy / platformach handlowych Forex, SWFX, oraz innych,
zadzwoń do nas lub pozostaw prośbę o oddzwonienie.
Aby dowiedzieć się więcej o handlu Forex/CFD na platformie Dukascopy Banku, rynku SWFX oraz innych rzeczy związanych z handlem,
zadzwoń do nas lub poproś o oddzwonienie.
To learn more about Crypto Trading / CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Business Introducer and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.