- Opened positions on gold are strongly bullish (62% long / 38% short)
- The immediate resistance for the yellow metal is currently located at 1,188
- At the same time, the nearby support for the bullion is placed at 1,180
- Upcoming events in the next 24 hours: France, Germany, Euro zone Manufacturing and Services PMI (Jun), US Manufacturing PMI (Jun), New Homes Sales (May) and Durable Goods Orders (May), France GDP (Q1)
© Dukascopy Bank SA
Gold experienced precipitous overnight losses on Tuesday as its safe-haven appeal was undermined by rising hopes that Greece would finally reach a deal with its international creditors and prevent a devastating default. Brussels called the plan "detailed, credible and impressive", and saw it as the basis for an agreement that would have further bailout funds released to Greece.
In addition to that, US sales of previously owned homes rose to the highest level in more than five years in May, the latest sign that housing and overall economic growth were gaining momentum in the second quarter. Meanwhile, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings climbed 0.51% to 705.48 tonnes on Monday, the first increase since May 26. Nevertheless, total assets remain near their lowest since September 2008.
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US durable goods orders to revive after surprising downward revision
Today the most important fundamental data to be released will undoubtedly be the US durable goods orders for May. The previous month's reading was unexpectedly revised considerably to the negative side, down from a 0.5% gain to a 0.2% decrease for the core indicator. This time the market expects the core orders to add 0.6%, even though the headline reading is predicted to fall further by 0.5%. The data is due before the American equity session opens at 15:30 PM GMT.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
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It seems that the XAU/USD cross experiences no major issues, while crossing a dense cluster of technical levels in time when the impetus appears. Yesterday, gold was sold off from 1,200 down to 1,185, and the metal managed to breach the monthly and weekly PP, 100 and 55-day SMAs. The nearest important demand in placed as close as 1,180 (2013 low, weekly S1), but bears are mainly targeting the June low at 1,162; therefore an attempt to depreciate further is likely to occur in the short-term, while any rebound should be capped by the June 10 high at 1,192.
Hourly chart
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SWFX long open positions stay broadly flat
Meanwhile, OANDA's bulls are in the safe majority with 73.28% (+7%) of all current positions. Gold's sentiment at OANDA is the second 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 60% (+5%) of bullish trades registered by 5:30 AM GMT on June 23.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between May 23 and Jun 23 expect, on average, to see Gold trading around 1,190 by the end of September. At the same time, 52% 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