- Opened positions on Gold remain bullish (56% long / 44% short)
- The closest resistance for the yellow metal is currently located at 1,212
- At the same time, the closest support for the bullion is placed at 1,203
- Upcoming events on May 27: Germany Gfk Consumer Confidence (Jun), G7 Finance Ministers' Meeting, Bank of Canada Interest Rate Decision and Rate Statement, Switzerland UBS Consumption Indicator (Apr), Japan Retail Sales (Apr)
Gold remained above $1,200 an ounce on Tuesday, being stuck in a tight trading range, as the Greenback rose to one-month high versus its major counterparts amid prospects of higher interest rate in the US later this year. After US and British holidays on Monday, investors will be watching closely US economic data, including consumer confidence, durable goods orders and home sales, later today to assess the world's number one economy's strength. Also, the Greek debt crisis remains one of the precious metal's key drivers, with any worsening of the crisis potentially boosting the safe-haven demand for bullion.
Meanwhile, Bank of Japan Governor Haruhiko Kuroda said the Japanese economy is now overcoming deflation, offering a more upbeat outlook for the nation's economy. Thus, the BoJ saw no need of further easing measures to achieve its 2% inflation target. Yet, Kuroda highlighted that the BOJ stood ready to expand stimulus again if the nation's economy falters and threatens to disrupt the broad uptrend in inflation.
Japan's retail trade expected to pick up in April
Retail sales data from Japan is due in the night between Tuesday and Wednesday. Economists suggest the indicator will revive by 5.9% in April, year-on-year. Any numbers released will follow a steep 9.7% slump in March. Meanwhile, the Bank of Canada is holding a scheduled monetary policy meeting tomorrow. The key interest rate is, however, estimated to be kept unchanged at 0.75%.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
For the fifth consecutive day the yellow metal has been remaining broadly unchanged just above the 1,205 mark, even though it has made several attempts to exit from the vicinity of 1,203-1,212 range. The closest supports and resistances are keeping the bullion range bound. XAU/USD needs to consolidate either above 1,213 or below 1,203 to confirm its bullish or bearish intentions, respectively. Meanwhile, daily technical indicators are now sending strongly positive signals to buy gold, but medium and long-term ones are still staying pessimistic on the cross.
Hourly chart
SWFX opened positions on gold are positive
However, OANDA's bulls continue to enjoy a stable majority with 70.43% 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 are 65% of bullish trades registered by 5:30 AM on May 26.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 26 and May 26 expect, on average, to see Gold trading around 1,220 by the end of August. At the same time, 62% of them believe the bullion will be strongly above 1,200 in three months, while 23% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.