- Opened positions on Gold remain positive with a confident majority of bullish trades (69% bullish / 31% bearish)
- It is possible that Gold will grow in price further, with the closest resistance for it located at 1,229
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,216
- Upcoming events on February 18: Non-monetary Policy's ECB Meeting; Germany 10-y Bond Auction, US Housing Starts, Building Permits, Producer Price Index and Industrial Production (Jan), FOMC Meeting Minutes, Bank of Japan Monetary Policy Statement and Press Conference, Bank of England's MPC Meeting Minutes, UK Claimant Count Change (Jan) and Unemployment Rate (3M Dec)
Gold registered a three-day rally as European officials failed to reach an agreement over a new Greek debt deal as Athens rejected an offer to ask a six-month extension of its international bailout package. The impasse has reinforced concerns that Greece is moving closer to a disruptive exit from the Euro zone. Bullion was hit by a stronger Greenback, which makes the dollar-denominated metal more expensive for holders of other currencies. The decline in the yellow metal comes on the eve of China's week-long Lunar New Year holiday, after which prices tend fall as demand from the world's second largest gold consumer fades.
As gas prices continue to decline, US consumers find themselves with extra cash in their pockets to spend this year. According to a report from investment banking company Jefferies, lower gas prices could result in an additional $120 billion to $200 billion for US households, translating into $950 per driver. Given consumer spending accounts for around 70% of the US economic activity, the world's number one economy's growth is likely to substantially accelerate this year.
Central banks' meeting minutes to be in focus tomorrow
According to the economic calendar for February 18, the day will largely be dominated by data from major central banks around the world. The Federal Reserve and the Bank of England are both due to publish their minutes of last meetings, while the Bank of Japan is releasing its monetary policy statement tomorrow, which will be followed by regulator's press conference.XAU/USD forms down-trend after touching 1,307 mark
XAU/USD cross breached the most important resistance on January 3, represented by the long-term downtrend line, which is currently located at 1,201. Consequently, it started to develop above this level to hit the 1,300 mark already on January 21. It, in turn, used to act as a strong supply for Gold in order to resume declining. If the bullion comes under uplifted bearish pressure and manages to consolidate below 1,250 by the mid-February, then we may see the metal's gradual decrease in price back towards 1,200 in the medium-term. Moreover, the long-term outlook for the yellow metal is also remaining negative, mostly reflecting strength of US fundamental factors and QE potential effects in Europe. Therefore, in course of the first quarter the bullion is suggested to lose value.Daily chart
Even though on Monday the yellow metal succeeded in staying above a strong resistance area at 1,230, on Tuesday it has momentarily erased all gains of two previous days. Currently, Gold is trading around the mentioned zone of important levels (38.2% Fibo, weekly PP). Judging from technical indicators on a daily time-frame, bearish pressure should persist in the near term, and in course of today's trading session the metal is likely to decline down to 1,215, the closest support line reinforced by 100-day SMA and weekly S1.
Hourly chart
SWFX opened trades stay confidently on positive side
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jan 17 and Feb 17 expect, on average, to see Gold trading around 1,310 by the end of May. At the same time, 58% of them believe the bullion will be strongly above this mark in three months, while 28% of traders surveyed forecast the bullion to trade in the range between 1,150 and 1,300.