Gold showed weak recovery symptoms in today trading sessions with a 1235 high, after plunging to 1225.74 low yesterday, but still remains bearish. US economic data was positive yesterday, which added more weight to gold's bearish forces. The decline journey was postponed as US Republicans voted yay on Trump's health-care-bill, replacing Obamacare, and Democrats were repelled by such move. As a result, US dollar shed $0.79 and U.S Index plunged to 98.54 low, giving XAUSUD a chance to take a breath. Gold currently trading 1233 intraday, slightly below 200 EMA (D1) at 1237 which to be considered a critical level.
US Economic Data today will have a major contribution to gold levels, with NFP in focus, and Yellen (Head Of U.S Fed) will cross wire afterwards and the most preferable scenario is that FOMC members along with Yellen will guard U.S Dollar from further declines supported by yesterday's positive data, along with the outcomes of NFP, Average Hourly Earnings m/m, and Unemployment Rate. On the other hand, French Elections this Sunday and tails of uncertainties could provoke gold to peek higher as market sees the precious metal as a sacred haven substitute.
As for physical demand of gold, global gold demand in Q1 2017 was 1,034.5t. The 18% year-on-year decline suffers from the comparison with Q1 2016, which was the strongest ever first quarter. Inflows into ETFs of 109.1t, although solid, were nonetheless a fraction of last year’s near-record inflows. Slower central bank demand also contributed to the weakness. Bar and coin investment, however, was healthy at 289.8t (+9% y-o-y), while demand firmed slightly in both the jewelry and technology sectors. (WGC).
Fundamentals:
1- USD - Average Hourly Earnings m/m + Non-Farm Payrolls + Unemployment Rates today at 12:30 PM GMT.
2- USD - Yellen (Head of U.S Fed) speech today at 5:30 PM GMT.
3- French Presidential Elections this Sunday all day long.
Technical Overview:
Trend: Bearish Sideways
Resistance levels: R1 1237.41, R2 1248.10, R3 1260.22, R4 1278
Support levels : S1 1225.80, S2 1218.23, S3 1208.93, S4 1194.76
Comment: Currently Gold to be considered bearish, but due to U.S Data today and French Elections approaching, we could see high volatility for XAUUSD with choppy sideways destination. A penetration for R1 level projects further bullish waves with R2 level target. Closing above R3 level will shift gold to bullish momentum. The other scenario, in case gold break below S1 level, intensive selloffs with congestion seeing S2&S3 as target.