- SWFX traders are 52% bullish
- 74% of pending orders in 500-pip range are set to BUY the gold
- Pair rises to 1,281.00 amid political turmoil in Saudi Arabia
- Upcoming Events: Fed Chair Yellen speaks, Trump visits South Korea
Anti-corruption arrests in the Saudi elite raised concern over stability in the Middle East and drove the prices of gold up. There is also a need to take into account an effect from Trump's visit to South Korea and upcoming American navy drills in the Western Pacific that are likely to maintain high demand for safe haven metal for some while.
The Labour department revealed that the US job growth sped up in October, while the yearly wage growth as well as participation rate fell in the reported period, clouding the outlook of the job market. The report showed that the country's economy added 261K jobs in the reported period, missing forecasts for a 310K increase. The weak pay growth is likely to hamper inflation to reach 2% target.
Empty Monday
The only notable event that economic calendar contains for today is Janet Yellen's speech at the presentation of the Paul H. Douglas Award for Ethics in Government, in Washington. However, this event is unlikely to cause major price movements in the market. In contrast, the US President Donald Trump's meeting with his South Korean counterpart and ongoing political changes in Saudi Arabian establishment have a chance to continue to drive demand for the bullion.
XAU/USD surges amid political changes in Saudi Arabia
A sudden cleansing in the Saudi establishment enhanced uncertainly about the situation in the Middle East and, as a result, magnified demand for gold. On hourly chart this search for safe haven assets signified creation of a second reaction low a two-week long junior ascending channel. Moreover, the rapid surge allowed the pair to rapidly reach the weekly R1 at 1,281.00. As markets have calmed down already, bears are expected to start pushing the pair back to the bottom. However, there is little chance the rate will succeed to return back to support zone near 1,268.00, as the road to the south is obstructed by a combination of the 55-, 100- and 200-hour SMAs together with the weekly PP at 1,273.35. Unless the rate receives a proper impulse, it is expected to halt the fall there.
Hourly Chart
Although the rate was expected to continue to fluctuate below the monthly PP and the 61.8% Fibonacci retracement level at 1,279.00, but the news coming from the Middle East created a powerful upside momentum to drive the pair to the top. Nevertheless, it is not clear whether the bullion will continue the surge or retreat. Most probably at the end of this trading session the rate will be left undetermined near the 1,280.00 mark (unless it receives another impulse from some fundamental event).
Daily Chart
Markets sentiment remain bullish
Traders of Dukascopy are neutrally bullish on valuation of the gold, as 52% of open positions are long. Accordingly, 52% of pending commands are to buy the commodity.
OANDA traders are bullish, as 70% (-2%) of open positions are long, compared to previous trading day. In the meantime, SAXO bank traders are less bullish, as 57% (-1%) of open positions are long.