- Opened positions on Gold remain strongly positive (74% bullish / 26% bearish)
- The closest resistance for the yellow metal is currently located at 1,210
- At the same time, the closest support for the bullion is placed at 1,200
- Upcoming events on May 1: US Manufacturing PMI (Apr) and Reuters/Michigan Consumer Sentiment Index (Apr), China Non-Manufacturing PMI (Apr) and NBS Manufacturing PMI (Apr), UK Mortgage Approvals (Mar)
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Gold declined following the Fed's comments on its monetary policy adjustment, but managed to stay above the key $1,200 an ounce on Thursday. The US central bank characterized the recent slowdown in the world's number one economy as transitory, keeping the door open for an interest rate hike this year. The US economy grew 0.2% in the first quarter, following the 2.2% growth in the three months through December 2014. Investors would now be watching more US fundamentals to estimate how it would affect the Fed's interest rate. On top of that, the Greek debt crisis remains in the spotlight as well, as it could boost safe-haven demand for gold.
Meanwhile, the Bank of Japan defied expectations it might expand its monetary stimulus to revive, keeping policy unchanged. As widely expected, the BoJ kept its pledge to expand base money at an annual pace of 80 trillion yen through purchases of government bonds and risky assets.
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US, UK fundamentals forecasted to show improvement tomorrow
Among major fundamentals that will be released on Friday of this week, all of them are currently expected to register a rebound in the numbers. In the US, manufacturing PMI and Reuters/Michigan consumer sentiment index are both estimated to grow slightly. Moreover, UK mortgage approvals have probably jumped to 62,300 in March, up from 61,760 a month before. Meanwhile, the majority of European countries have a Bank Holiday on the first day of May.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. In March 2014, however, the yellow metal resumed gaining value, even without touching the lower trend-line, at that time located around 1,150. Towards the end of June the bullion is likely to develop in the direction of the upper boundary of this pattern just below 1,260 where bears are forecasted to overtake a lead and drive the metal back to the south. However, the metal can also be stopped by the 200-day SMA around 1,220. The overall negative trend for Gold seems inevitable in the long-term future, while at the end of this year the precious metal is likely to consolidate around 1,150, in case the present trend persists.Daily chart
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Influenced by mild bearish impetus, created by 100-day SMA and upper Bollinger band, the yellow metal declined in price on Wednesday. However, XAU/USD's losses used to be limited, and the closest demand at 1,200 did not let the bears to extend a drop. The support is currently created by weekly R1, as well as 20 and 55-day SMAs. In case Gold decides to resume its bearish tendency, it will have to close below 1,194 to confirm the near-term negative outlook. On the other hand, a closure above 1,214 will give the metal an opportunity to jump up to 1,222 (200-day SMA).
Hourly chart
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SWFX opened positions on Gold remain strongly positive
Meanwhile, OANDA's bulls continue to enjoy a stable majority, and their share of total opened positions gained even more during past 24 hours to reach 65.56% in the morning today. Gold's sentiment at OANDA is currently only the third most positive among all major currency pairs, up three places on a daily basis. Saxo Bank market participants, from their side, are also optimistic with respect to the precious metal, as there are 60% of bullish positions registered by 5:30am GMT on April 30.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Mar 30 and Apr 30 expect, on average, to see Gold trading around 1,230 by the end of July. At the same time, 50% of them still believe the bullion will be even above 1,250 in three months, while 32% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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