- Opened positions on gold are strongly bullish (66% long / 34% short)
- The immediate resistance for the yellow metal is currently located at 1,171
- At the same time, the nearby support for the bullion is placed at 1,158
- Upcoming events in the next 24 hours: Germany Factory Orders (May), US Services PMI (Jun) and ISM Non-Manufacturing PMI (Jun), Canada Ivey PMI (Jun), Reserve Bank of Australia Interest Rate Decision
Gold failed to sustain earlier gains on Monday as a strong Dollar outweighed safe-have demand after Greek voters decisively rejected the bailout package offered by European partners. Bullion continues to struggle amid prospects of higher US interest rates despite the uncertain future of Greece in the Euro zone and the country's financial position, a situation that would typically provide support to the yellow metal. However, it is believed the precious metal could receive a boost if the Fed decides to delay a rate hike or if there is contagion threat in the Euro zone due to the Greek crisis.
Australia's retail sales rebounded in May after a soft performance in April, but remained weaker than economists had expected, according to the Australian Bureau of Statistics. Retail spending increased 0.3% in the reported month, following the 0.1% drop in April and coming in against the median forecast for a 0.5% increase. Clothing, footwear and accessories retailing was strong during the month, rising 0.8%, while food retailing and household goods also increased. However, spending on cafés, restaurants and takeaway, and department stores stalled during the month.
RBA forecasted to keep interest rates unchanged
The Reserve Bank of Australia is predicted keep the monetary policy stance unchanged at its meeting tomorrow, even though RBA officials have recently stated that the central bank is open to further policy easing amid strong Aussie and weak economic growth. The Official Cash Rate, currently at 2%, will be announced tomorrow at 4:30 AM GMT.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, but the growth stalled beneath the 2009 high at 1,230. In the foreseeable future the rally is likely to be limited and the bullion should be driven by the 200-day SMA around 1,200, which has 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
The bullion gained value for the first time in four days last Friday, and the trading opened even higher around 1,174 Monday, pricing in the result of the Greek referendum. However, gains are likely to be slashed in the near-term, judging from the most recent downward price developments. The precious metal is also estimated to slump in the medium-term, according to the weekly technical indicators. The closest support is placed at 1,158 (Bollinger band), followed by the monthly/weekly S1 at 1,154.
Hourly chart
SWFX sentiment strongly bullish toward gold
Meanwhile, OANDA's bulls are in the safe majority with 81.50% of all current positions. Gold's sentiment at OANDA is the second most positive among all major crosses at the moment. Saxo Bank market participants are also optimistic with respect to the precious metal, as there were 71% of bullish trades registered by 5:30 AM GMT on July 6.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Jun 6 and Jul 6 expect, on average, to see gold trading around 1,175 by the end of October. At the same time, 47% of them believe the bullion will be above 1,200 in three months, while 30% of traders surveyed forecast the precious metal to trade in the range between 1,050 and 1,200.