- SWFX traders remain bearish with 54% of open positions being short
- 58% of pending commands are to buy the bullion
- The metal's price opened the day's trading at 1,262.39
- Upcoming Events: US Unemployment Claims; Empire State Manufacturing Index; US Import Prices; Philly Fed Manufacturing Index; US Capacity Utilization Rate; US Industrial Production
Just as most other financial instruments traded against the US Dollar the yellow metal's price experienced high volatility in the past 24 hours. However, the bullion has returned to trade at previous levels near the 1,260 mark. In addition, it continue to be influenced by the same levels of significance as during the rest of this week's trading.
As markets expected, the Federal Reserve raised its interest rates at the end of its meeting on Wednesday, adding that it would start cutting its Treasury bonds and other securities this year amid solid economic growth and strong employment trends. Despite the release of weak retail sales and inflation figures earlier in the day, policymakers voted to lift its benchmark lending rate to a target range of 1.00-1.25% and predicted one more rate hike this year.
Massive amount of US data
Data sets, which usually cause minor impact on the US Dollar, are set to be released on a large scale in the second part of the day. At 12:30 GMT most of the data will be released. At that time the US Unemployment Claims, Empire State Manufacturing Index; US Import Prices; Philly Fed Manufacturing Index are set to be out simultaneously. Afterwards, at 13:15 GMT, the US Capacity Utilization Rate and the Industrial Production data will be published. Any of these data sets might cause fluctuations, if they diverge too much from the average market forecasts, published by Bloomberg.
Gold reaches above 1,280 before falling
The yellow metal is continuing its decline, as the metal traded near the 1,260 mark on Thursday morning. However, there are bad news for the bears, as during the data releases of Wednesday the commodity price managed to surge and reach above the 1,280 mark, which most likely triggered a lot of stop losses. The bullion retreated once more to trade near the 1,260 after the Federal Reserve made their announcements at 18:00 GMT during yesterday's trading session. It can still be expected that the gold price will decline down to the 1,255.79 mark where the first weekly support was located at on Thursday. The support is also strengthened by the close by located monthly pivot point at the 1,253 mark.
Hourly Chart
On the daily chart it can be observed that on Thursday the metal's price is being held back from falling to the weekly S1 by the 55-day SMA. However, the simple moving average was passed during Wednesday's trading, as the commodity price reached for the support at 1,255.79, where the weekly S1 is located at. Due to that factor it can be assumed that the support of the moving average will give in eventually.Daily Chart
Mixed signals regarding gold
Traders have increased their bearish sentiment, as 55% of open positions are short on Thursday, compared to 53% during the rest of this week. Meanwhile, 58% of trader set up orders are to buy the metal.
OANDA Gold traders remain slightly bullish, as open positions are 54.69% long on Thursday, compared to 57.09% yesterday. Meanwhile, traders of SAXO bank have become bearish, as 53.03% of open positions are short
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of gold being slightly below 1,350 in three months
Traders who were asked regarding their longer-term views on gold during the last month expect, on average, to see the metal around 1,325 in the middle of September. Generally, 42% (+6%) of participants believe the price will be above 1,350 in ninety days. Meanwhile, an astonishing 27% (-6%) are voting for tight range between the 1,300 and 1,350 marks.