- Market sentiment is 56% bearish
- 51% of pending orders in 1000-pip range are set to SELL gold
- The yellow metal's price declined almost as expected
- Gold prices might reach 1,300 level
The bullion has continued to descent and it has reached previously set target. However, the decline of the metal's price occurred after a longer consolidation period than it was initially expected.
Durable goods orders report was one of the weakest currency triggers on Tuesday; in fact, it could not compete with the Fed Chair Powell testimony, making the overall sentiment hovering in limbo.
The Commerce Department said that the US durable goods plummeted 3.7% for the month of January. The drop occurred because the demand for transportation equipment tumbled 10.0%, reaching a six-month low, following a 2.6% increase in the prior month.
Bears love new Fed chairman
The economic calendars are showing that Jerome Powell is set to speak once more in front of the Congress. Meanwhile, a rather minor data release will occur at the same time.
The ISM Manufacturing PMI is set to be published at 15:00 GMT. Note that tit is the exact time, as the text of the Federal Reserve's Chairman's will published. Due to that reason the fluctuations could be massive as on Tuesday.
The data release will be covered by the Dukascopy research team on the bank's live webinar platform. The coverage is set to start ten minutes before the release.
To join the webinar one needs to click on the notification that should pop up a minute before the start on all of the bank's trading platforms. On the other hand joining is possible at any time by either googling Dukascopy webinars or finding them in the TV section.
XAU/USD declines as expected
The expected decline of the yellow metal has occurred. However, it did not come into reality exactly as it was expected.
The bullion broke the narrow ranged channel down pattern. The narrow pattern turned out to represent the junior decline in the borders of a wider descending pattern.
The newly discovered pattern was the one, whose upper trend line provided the resistance needed for the speculated decline.
In regards to the near future, on Thursday morning the range down to the levels near the 1,300.00 mark was free from support.
Hourly Chart
The fundamental events of Tuesday managed to finally force the commodity price into breaking free from the previously active long term chart's medium scale pattern. However, this move was expected to occur.
Meanwhile, it seems that a new medium scale pattern has been properly spotted. In accordance with that pattern, drop down to as low as 1,300.00 mark might occur.
Daily Chart
Markets short the metal
SWFX market sentiment remains 56% bearish. Meanwhile, pending commands are set to buy the bullion in 51% of all cases.
OANDA traders are almost neutral, as 51% of open positions are short on Thursday, compared to 51% long on Wednesday. In addition, SAXO bank traders are 54% bullish.