- Opened positions for Gold are strongly positive (72% bullish / 28% bearish)
- It is possible that Gold will grow in price, with the closest resistance for it located at 1,192
- At the same time, the probability of a downside movement exists as well, while for that purpose the closest support is placed at 1,168
- Upcoming events: Bank of Japan Monetary Policy Meeting Minutes and Governor Kuroda Speech, Japanese Housing Starts, Industrial Production, Retail Sales, Core CPI and Household Spending
Gold stayed close to the lowest level in three weeks on Wednesday as better-than expected US GDP data underpinned equities and the US Dollar. The world's biggest economy grew 5.0% in the third quarter, the quickest pace in 11 years, beating economists' expectations for a 4.3% rate. Both the Dow and the S&P 500 soared on Tuesday following the GDP report, with Asian stocks following their lead today, while the US Dollar index rose to the nine-year peak. The upbeat data could also prompt the Fed to hike interest rates soon, a factor that would hit non-interest-bearing precious metal.
A separate reading on US durable goods orders unexpectedly slumped in November, largely owing to a weak demand for military and defense goods. The Commerce Department said that orders for long-lasting goods declined 0.7% last month, the third drop in the past four months. Much of the decrease was attributed to a sharp 8.1% fall in demand for defense-related goods. Excluding volatile transportation equipment, bookings slid 0.4%.
Japanese data to drive Gold during Christmas period
Among all fundamental statistics that is going to be released towards the end of this week, the most attention should be paid to the monetary policy meeting minutes of the Bank of Japan, and the publication of them is awaited in the night between Wednesday and Thursday. Following that, the Bank of Japan's Governor Haruhiko Kuroda will give a speech. Moreover, there will be fundamental data on household spending, inflation, industrial production and retail sales, which is going to be revealed in Japan tomorrow.XAU/USD returns back below down-trend
The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend and developed above this level for the past week. However, on December 15 Gold returned back, mostly amid fundamental factors. At the moment the most considerable resistance is represented by this long-term downtrend line, which is currently located at $1,205 and strengthened by the monthly R1, weekly PP and 55-day SMA. Nevertheless, by the end of the year we are still suggesting Gold to depreciate and trade in the direction of the monthly pivot point at $1,168.Daily chart
Taking into account the short-time development of Gold's price, it was almost completely unchanged during the trading day on Tuesday. The bullion made an attempt to return back above the 2013 low and weekly S1, but these levels were strong enough to keep bulls under pressure. As a result, Gold is still trading around $1,175 level. Even though during holidays no major drivers for Gold are expected, technical indicators on both short and medium-term started giving signals to sell the metal. Therefore, we may see it falling down to the monthly PP in the foreseeable future.
Hourly chart
Long opened positions stay unchanged
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Nov 24 and Dec 24 expect, on average, to see Gold trading just above 1,200 by the mid-March. At the same time, 49% of them believe the bullion will be above this mark in three months, while one third of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.