- Market sentiment is 51% bearish
- 57% of pending orders in 1000-pip range are set to BUY gold
- Bullion is propelled by fundamental events
- The metal's price has reached the 1,330 mark
The recent fall of the US Dollar has caused the yellow metal's price to surge to the 1,330 mark. Namely, it was Trump's firing of his Secretary of State and the announcement of possible tariffs on the Chinese tech sector.
The Bureau of Labour Statistics revealed on Tuesday that February consumer price index hit the forecasts, rising at a 0.2% pace, following the 0.5% move up recorded in the previous month.
The US Labour Department raised concerns that inflation is likely to accelerate, and, as a result, the Fed could hike interest rates faster than anticipated. Investors are carefully watching the situation in the market and looking for clues on how quickly the rates could be raised.
Retail sales and PPI for lunch
The week of US macroeconomic data releases continues. Today we are expecting the release of the US Retail Sales and the PPI data sets. The data will be out at 12:30 GMT, and it will be covered by the Dukascopy research team on the bank's webinar platform.
Join the Dukascopy's webinar platform ten minutes before the release to watch the live coverage of the event. It can be done by googling the Dukascopy Webinars or finding the link in the TV section of our website.
In addition, the rest of the week will also have notable data releases that the Dukascopy research team will cover on the bank's live webinar platform. In general, each day at 12:30 GMT there will be a data release.
XAU/USD limited by strong support
Gold was driven by bears early on Tuesday who pushed the yellow metal down to the upper boundary of the breached wedge pattern and the 38.20% Fibo near 1,316.70.
The pair's subsequent direction was determined by the US inflation release which introduced volatility in the market. As a result of this 45% surge, Gold dashed through the strong resistance of the 55-, 100– and 200-hour SMAs and was located at the 1,330.00 mark by Wednesday morning.
Technical indicators are strongly bearish in this session. However, it is unlikely that the aforementioned SMAs are breached until US fundamentals are released at 1230GMT.
The ultimate low should be the 1,315.00 mark, while gains are likely to be capped near 1,335.00.
Hourly Chart
On the daily chart one can notice that the recent resistance encountered is not just represented by the upper trend line of the short term channel. Near that level the support line of the previously active dominant ascending channel pattern is acting as a resistance.
Daily Chart
Markets short the metal
SWFX market participants continue to short the metal, as traders are 51% bearish. Meanwhile, pending commands have become bearish, as 53% of all set up orders were to sell.
OANDA traders remain slightly bullish, as 55% of open positions were long on Wednesday. In addition, Saxo bank traders are also going long in 50% of all cases.