- Opened positions on Gold remain positive (64% bullish / 36% bearish)
- The closest resistance for the yellow metal is currently located at 1,173
- At the same time, the closest support for the bullion is placed at 1,146
- Upcoming events on March 11: France Non-Farm Payrolls (Q4) and Current Account (Jan), ECB President Mario Draghi's Speech, US Monthly Budget Statement (Feb), China New Loans (Feb), Industrial Production (Feb) and Retail Sales (Feb), Australia Home Loans (Jan), UK Industrial Production (Jan), RBNZ Interest Rate Decision and Monetary Policy Statement
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Gold traded near a three-month low on Tuesday as stronger than expected US data argues for a mid-year hike in US interest rates, while the Greenback remained at a 11-year peak. The precious metal was hit by Friday's robust non-farm payrolls data, renewing expectations the Fed would begin policy normalization by the middle of the year. Higher interest rates could undermine demand for assets, which do not pay interest such as gold, as well as support the Dollar, which on Tuesday rose to its highest level since September 2003 versus a basket of major currencies, denting yellow metal's safe haven lure.
Meanwhile, more economists believed the Fed's policy is appropriate. According to the National Association for Business Economics, 58% of economists thought the Fed's approach was "about right", compared with 53% in August. Around 36% said monetary policy was too stimulative, down slightly from 39% in August.
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Fundamentals to provide Gold with momentum on March 11
A lot of important statistical indicators are going to be published all around the world tomorrow; therefore, Gold is likely to stay volatile during trading and respond to any major or unexpected changes. Among those events, the ECB President Mario Draghi is giving a speech tomorrow in Frankfurt. Moreover, the Reserve Bank of New Zealand is making is a scheduled interest rate decision. Here, even though expectations are for no change of the main rate at 3.5%, recent surprising decisions of major central banks are giving this event a high level of attention among analysts.Read More: Fundamental Analysis
XAU/USD develops inside bearish channel on daily chart
On January 22, the level at 1,300 which acted as a strong supply for Gold forced the yellow metal to resume declining. Moreover, the bullion succeeded in consolidating below 1,200 during the first week of March, following a period of considerable losses. Taking into account strength of US fundamental factors and potential positive effects from the expanded asset purchases programme in the Eurozone, the long-term outlook for Gold is remaining fairly bearish. Even though some medium-term bullishness can be created by the 2014 low around 1,130, the precious metal is likely to develop below this level in course March-May time period. Moreover, in case of consolidation below this mark, a drop down to 2010 low at 1,044 will be broadly expected to take place towards the end of the second quarter of 2015.Daily chart
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An attempt of Gold to return back above the monthly S1 (1,175) turned to be completely unsuccessful. The bullion was immediately sent back by this important resistance line, which is also strengthened by the 2013 low from the north. As a result of that, the precious metal resumed its bearish trend and is currently trading around the 1,160 mark. There are no technical levels that may support Gold until the weekly S1 at 1,146 and prevent further sell-offs. Therefore, forecasts for the yellow metal tend to stay strongly pessimistic at the moment.
Hourly chart
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SWFX opened positions stay slightly positive
Meanwhile, OANDA's bulls continue to enjoy a firm majority as their share of total opened trades stays at 71.25% at the moment, thus giving a slight decrease from yesterday. As a result, Gold's sentiment is currently the third most positive among major currency pairs at OANDA. In addition, SaxoGroup market participants are also positive with respect to the yellow metal, as there are 68% of bullish positions registered by 7:00 GMT on March 10.
Spreads (avg,pip) / Trading volume / Volatility
Traders, who were asked regarding their longer-term views on XAU/USD between Feb 10 and Mar 10 expect, on average, to see Gold trading just below 1,250 by the end of June. At the same time, 51% of them still believe the bullion will be strongly above this mark in three months, while 30% of traders surveyed forecast the bullion to trade in the range between 1,100 and 1,250.
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