- Opened positions on gold are strongly bullish (63% long / 37% short)
- The immediate resistance for the yellow metal is currently located at 1,204
- At the same time, the nearby support for the bullion is placed at 1,197
- Upcoming events today: US Existing Home Sales (May), Euro Summit in Brussels
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On Monday, gold traded near its highest level in almost four weeks after rising last week amid expectations a US interest rate hike may come later than initially projected. Yet, gains were limited by signs of progress in Greek debt negotiations. Greece's Prime Minister Alexis Tsipras presented a new offer on a reforms package to international creditors on Sunday, signalling the standstill that has pushed the country to the verge of bankruptcy is likely to be broken soon.
Meanwhile, San Francisco Federal Reserve President John Williams believes that the US central bank should hike interest rates from near-zero twice this year if economic data meet expectations, highlighting that a delay of a hike for too long poses risks to the world's number one economy. However, Williams and other members of the Fed's board continue to be in a wait-and-see mode, stressing that a rate decision is dependent on economic data including jobs and inflation.
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US housing data to improve in May
On Monday, the most important fundamental data release will cover the existing home sales in the US for the month of May. The annualized sales' indicator is expected to advance from 5.04 million in April up to 5.25 million last month and will be published at 12:30 PM GMT. Existing home sales are considered as an important indicator of the property market's health, and they usually affect other sectors of the economy, including mortgage financing, construction and brokerage of executing the transactions.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. Two pattern's boundaries are represented by the upper trend-line around 1,270 and pattern's support at 1,115. Among recent developments, in March 2015 the yellow metal resumed gaining value, even without touching the lower trend-line. In the foreseeable future gains are likely to be limited and the bullion should be driven by the 200-day SMA around 1,210 with a slight bearish bias. Some short-term gains in the direction of the long-term downtrend (1,270) are not completely off the table, but bears are eventually going to overtake a lead and drive the metal back to the south. The overall negative tendency for Gold seems to be the case in the long run, while at the end of this year the precious metal should to consolidate around 1,150, in case the present trend persists.Daily chart
© Dukascopy Bank SA
Following the strongest jump since mid-May on Thursday, the yellow metal turned flat just before the weekend. XAU/USD posted no major spikes or drops on Friday, while trading between two major technical zones at 1,204 and 1,197. A close beyond one of these marks is required to confirm either bullish or bearish expectations for the bullion. Even though the upward scenario seems less difficult to accomplish, daily technical indicators are giving signals to sell the precious metal at the moment.
Hourly chart
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SWFX long open positions broadly stable after weekend
Meanwhile, OANDA's bulls are in the safe majority with 65.92% of all current positions. Gold's sentiment at OANDA is the third most positive among all major currency pairs at the moment. Saxo Bank market participants are also optimistic with respect to the precious metal, as there were 55% of bullish trades registered by 5:30 AM GMT on June 22.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 22 and Jun 22 expect, on average, to see Gold trading around 1,190 by the end of September. At the same time, 53% of them believe the bullion will be above 1,200 in three months, while 26% of traders surveyed forecast the bullion to trade in the range between 1,050 and 1,200.
© Dukascopy Bank SA