- Opened positions on Gold remain strongly positive (74% bullish / 26% bearish)
- The closest resistance for the yellow metal is currently located at 1,187
- At the same time, the closest support for the bullion is placed at 1,180
- Upcoming events on May 6: Euro zone Services PMI (Apr) and Retail Sales (Mar), Non-Monetary Policy ECB Meeting, US ADP Employment Change (Apr), UK Services PMI (Apr), Australia Retail Sales (Mar)
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Orders for US factory goods recorded the biggest rise in eight months in March, amid increased demand for transportation equipment. Yet, the underlying trend remained weak due to a strong Dollar. According to the Commerce Department, new orders for manufactured goods increased 2.1% following seven monthly drops, buoyed by a 13.5% advance in orders for transportation equipment.
The Reserve Bank of Australia cut interest rates to a new low against the backdrop of a deteriorating economic outlook and a stronger exchange rate. The RBA slashed the benchmark cash rate by 25 basis points to 2.0% in an attempt to back up demand, following the surprise decision to keep rates unchanged at 2.25% in April. Today's move marked the second time this year the central bank has eased its monetary policy, but the bank did not indicate whether it considers to loose policy further.
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US labour market data to drive commodity markets on May 6
On Wednesday of the current week, rather influential fundamental statistics from the US is going to set the tone on the markets, most likely providing them with significant volatility. While analysts are betting on the time frame of the Fed's long-awaited rate hike, employment data from ADP (along with non-farm payrolls on Friday) is one of the key indicators for the policy makers to make adjustments to the monetary policy stance.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. In March 2014, however, the yellow metal resumed gaining value, even without touching the lower trend-line, at that time located around 1,150. Towards the end of June 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. Eventually, bears are forecasted to overtake a lead and drive the metal back to the south. The overall negative trend for Gold seems to be the case in the long-term future, while at the end of this year the precious metal is likely to consolidate around 1,150, if the present trend persists.Daily chart
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The precious metal provided some up-trend on Monday, as a reliable resistance at 1,180 helped bulls to stay dominant on the market. Despite that, XAU/USD will soon face a resistance zone at 55-day SMA/monthly PP, which will put pressure on it in the near-term. A close above this area will give the metal an opportunity to rise up to 1,205. On the contrary, the bullion also remains under the risk of dropping as low as 1,150 (2015 low) in the medium-term, in case bears send the metal below the Bollinger band at 1,175.
Hourly chart
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Read More: Technical Analysis
SWFX opened positions on Gold remain strongly positive
Meanwhile, OANDA's bulls continue to enjoy a stable majority, and their share of total opened positions reached 71.92% in the morning today. Gold's sentiment at OANDA is currently the second most positive among all major currency pairs. Saxo Bank market participants, from their side, are also optimistic with respect to the precious metal, as there are 62% of bullish positions registered by 5:30am GMT on May 5.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Apr 5 and May 5 expect, on average, to see Gold trading around 1,220 by the end of August. At the same time, 46% of them still believe the bullion will be above 1,250 in three months, while 32% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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