Gold is flirting with July low again

Note: This section contains information in English only.
Source: Dukascopy Bank SA
  • Traders fixed profit over the weekend and pushed bullish market portion down from 60% to 57%
  • The 1,070 is set to be tested soon; a jump will expose recent December highs around 1,085
  • Daily technical indicators are mixed at the moment
  • Economic events to watch in the next 24 hours: Bundesbank Monthly Report; Euro zone Consumer Confidence (Dec); US 3/6-Month Treasury Bill Auction and Chicago Fed National Activity Index (Nov)

© Dukascopy Bank SA
Oil was the only commodity to trade in red on Friday, as the supply-driven story continues to spread across the markets. Investors are worried that demand will fail to cope with rising supply in 2016, meaning this factor will continue to create the bearish bias for prices. On Friday a decline was smaller than one full percentage point for both Crude and Brent, but it did not prevent the oil from reaching 11-year lows early on Monday. ANZ analysts assume that "the increase in rig count even in a low crude oil price environment suggests shale producers are committed to maintaining production levels." In the meantime, precious metals used to be the biggest gainers on the last trading day of the previous week. Silver and gold skyrocketed by 2.8% and 1.4%, respectively. They reflected somewhat weaker US Dollar and benefited from a sharp drop in equity markets. Gold rebounded further on Monday amid weakness in the US Dollar and equities, which helped the precious metal recoup some losses from the US interest rate hike last week. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings surged 2.98% to 648.92 tonnes on Friday, the first rise in two months. However, the Fed is expected to raise interest rates again in the next three months; therefore, any rally in gold will be limited.

Canada's inflation rate accelerated in November to the fastest pace in a year as higher gasoline prices dropped out of annual calculations, bringing the key gauge closer to the Bank of Canada's 2% goal. Canada's consumer price index jumped to 1.4% last month from a year ago, compared with October's 1%, according to Statistics Canada. However, core inflation, which excludes volatile items and is closely watched by the central bank, declined to 2.0%. Overall, prices rose in seven of the eight major components of the consumer price index. The transportation component, which includes gasoline, was the only one to decline. Still, its drop of 1.1% was the smallest annual decline registered since last November. Food costs increased 3.4% in November from a year earlier, with higher prices for fresh vegetables and meat contributing the most to the gain. A 1.2% increase in the cost of shelter also contributed to the rise in inflation. The relatively subdued rate of inflation was likely to give the central bank plenty of room to keep interest rates low after it cut them twice this year to offset the impact of cheaper oil prices on Canada's resource-oriented economy. The BoC said it does not view inflation as a big concern at the moment. In December, the central bank reiterated that the current underlying inflation is between 1.5% and 1.7%.


New Zealand businesses marked an optimistic end to 2015, with confidence surging to the highest level since April as recent economic data pointed to robust growth in the year ahead. The ANZ Business Confidence Index increased from 14.6 in November to 23.0 this month, with a reading above zero shows optimists outnumber pessimists. On companies' own activity, a net 34.4% anticipate to see growth, up from 32% in November, while a net 17.7% expect a bigger profitability in the coming year, compared with 14.9%. However, firms lowered their export expectations to a net 19.3% from 22.8% in the previous month. The confidence index came just a day after data showed the New Zealand's economy grew 0.9% in the third quarter, outperforming expectations for a 0.8% expansion. The Reserve Bank of New Zealand cut the official cash rate from 2.75% to 2.5% and pointed that inflation was likely to hit the central bank's 2% target midpoint without additional measures. However, inflation was at just 0.4% in the third quarter. Recent strength in the New Zealand Dollar dampens chances of an increase in import prices and inflation hitting the targeted level.

Watch More: Dukascopy TV

Upcoming fundamentals: No fundamentals on Monday to move gold prices



Gold prices are traditionally sensitive to any incoming fundamental news, especially from developed countries including EU and US. However, none of these regions will release a high-importance statistics during Monday, the first working day of the Christmas week. Some data will be out on Tuesday and Wednesday including US Final GDP and Durable Goods Orders.


Gold is flirting with July low again

Despite booking a weekly loss, the bullion managed to regain most of a Thursday's sell-off and grew back in the direction of 1,070. There gold is supposed to meet the July low and 20-day SMA, which will try to put formidable negative pressure on prices. In case they both are breached, the focus will then turn to the first weekly resistance at 1,080, followed by the monthly pivot point and upper Bollinger band at 1,086. At the same time, daily technical studies are mixed and estimate the trading to be broadly sideways throughout the next 24 hours.

Daily chart
© Dukascopy Bank SA

By trading close to the July low, the precious metal is also testing the reliability of 200-hour SMA in the one-hour chart. The moving average is offering some support for another resistance line, namely the downtrend at 1,075. The outlook will improve strongly, in case both of them are penetrated.

Hourly chart
© Dukascopy Bank SA

Bears are becoming more active to gain market share

Some of the SWFX traders decided to take profit from a climb that gold prices have seen back last Friday. As a result of that, the percentage of long market participants was slashed from 60% to 57%, the lowest level in almost six trading weeks.

The bears were successful in expanding their presence in both OANDA and SAXO Bank markets during the weekend. However, their overall sentiment remains generally positive with respect to the metal. Long OANDA clients are holding more than 71% of all open positions, while SAXO Bank traders are 68%-positive.















Spreads (avg,pip) / Trading volume / Volatility


Average expectation among market participants for the end of March 2016 is 1,100

Meanwhile, traders, who were asked regarding their longer-term views on gold between Nov 21 and Dec 21 expect, on average, to see the metal around 1,100 by the end of next year's March. At the same time, 46% (-1%) of participants believe the price will be generally below this level in ninety days. Alongside, 34% (-2%) of those surveyed reckon the price will trade in the range between 1,100 and 1,250 throughout the next three months.

© Dukascopy Bank SA

Actual Topics

Subscribe to "Fundamental Analysis" feed

Subscrever
Para saber mais sobre a plataforma de negociação Dukascopy Bank CFD / Forex, SWFX e outras informações relacionadas com negociação,
por favor entre em contato conosco ou faça um pedido de retorno de chamada.
Para obter mais informações sobre uma potencial cooperação,
ligue-nos ou faça-nos um pedido para ser contactado.
Para saber mais sobre as opções binárias do Dukascopy Bank / Plataforma de negociação Forex, SWFX e outras informações relacionadas com Trading,
ligue-nos ou faça-nos um pedido para ser contactado.
Para saber mais sobre a plataforma de negociação Dukascopy Bank CFD / Forex, SWFX e outras informações relacionadas com negociação,
por favor entre em contato conosco ou faça um pedido de retorno de chamada.
Para saber mais sobre a plataforma de Trading / Trading de Crypto/ CFD / SWFX e outras informações relacionadas à negociação,
ligue-nos ou faça-nos uma pedido para ser contactado.
Para saber mais sobre o programa de Introdutor de Negócios e outras informações relacionadas à negociação,
ligue-nos ou faça-nos uma pedido para ser contactado.
Para obter mais informações sobre uma potencial cooperação,
ligue-nos ou faça-nos um pedido para ser contactado.