- 50% of all SWFX open positions are bullish, as the sentiment is neutral
- Prices fluctuating below 1,320 level on Monday morning
- Gold has returned to the previous sticky level
- Economic events to watch over the next 24 hours: New Zealand Trade Balance (April)
As markets expected, the European Central Bank (ECB) kept its key interest rates on hold on Thursday, but signaled that it is prepared to add more monetary stimulus later in the year. The main refinancing rate was left at 0%, whereas the ECB interest rates on the deposit facility and the marginal lending facility remained unchanged at -0.40% and 0.25%, respectively. The central bank slashed its deposit rate deeper into negative territory in March. In a news conference, Mr. Draghi said the Brexit vote had added to "headwinds" for the Euro zone economy that include broader geopolitical uncertainty. Mario Draghi, President of the European Central Bank, also confirmed that the monthly asset purchases of 80 billion euros may run beyond the current deadline of March 2017, if necessary. Furthermore, the central bank's President highlighted that the governing council may provide more stimulus at its next meeting in September, as new post-Brexit forecasts for economic growth and inflation will be available by that time. Meanwhile, analysts polled by Reuters slashed their growth forecast for the Euro zone to 1.3% from 1.6%, but left inflation projections unchanged at 1.3%.
Official figures from the US Department of Labor showed on Thursday that the number of Americans filing for government unemployment benefits in the week ended July 16 dropped to 253,000 from 254,000 registered in the previous seven days, signaling that the labor market continues to improve. In the meantime, market analysts expected initial jobless claims to rise to 271,000 in the reported period, after remaining at a three-month low of 254,000 filings for two consecutive weeks. Last week was the 72nd consecutive week that initial claims were below the 300,000 level, extending the longest streak since 1973. Meanwhile, it is expected that jobless claims data can be volatile in July as automakers begin the process of temporarily shutting down plants to retool them for the new model year. In Michigan last week, applications for jobless benefits decreased 9,600 on an unadjusted basis, while claims in Ohio fell 2,500. Other data on Thursday showed that factory activity in the country's mid-Atlantic region contracted in July, as the Philly Fed Manufacturing Index fell to -2.9 in the reported month, compared to the previous month's reading of 4.7, while analysts anticipated a slight improvement to 5.1 points.
Upcoming fundamentals: New Zealand trade data
There are almost no new data publications set for Monday, which could affect gold prices, with the exception of one. Data from New Zealand sometimes has a tendency to affect commodity prices, as the country's economic situation shows an insight into its possible volume of commodity exports. Today Statistics New Zealand will release the NZ Trade Balance for April, which is expected to be at 155 million New Zealand Dollars. However, previous months experts have predicted the number very poorly.
Gold below 1,320 on Monday
Daily chart: The Yellow metal fell on Friday, as it started day's trading session at 1,331.42 and ended Friday's session at 1,321.39. However, the bullion started Monday's trading higher at 1,322.70, and afterwards by 5:15 GMT the metal had fallen to 1,317.40. In addition, gold was more volatile to the downside during the new week's first session, as it had touched the 1,313.54 level. If the bullion, continues to move lower, it is set to meet the support provided by the newly formed weekly S1 at 1,308.84.Daily chart
Hourly chart: The hourly chart shows that the yellow metal moved lower starting midnight between Thursday and Friday, when the commodity hit the 200-hour SMA at 1,332.66 and bounced off of it. The metal moved lower past the 20 and 100-hour SMAs until it rebounded against the 55-hour SMA at 1,322.98. Afterwards, the bullion moved up to the 20 and 100-hour SMAs at 1,326.04, and it bounced off them and moved back to the 55-hour SMA. These movements happened during Friday's session. On Monday morning, the metal fell majorly at midnight, as it moved from 1,323.17 to 1,315.61. Since then, the commodity has slightly recouped.
Hourly chart
SWFX sentiment remains neutral on Monday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 65.54%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 62.60% of positions are long.