- SWFX traders are 52% bullish
- 69% of pending commands are to buy the metal
- The bullion opened at 1,198.52
- Upcoming Events: US CPI; US Core CPI; US Retail Sales; US Core Retail Sales; Federal Funds Rate; FOMC Economic Projections; FOMC Statement; FOMC Press Conference
The US private sector created more jobs than expected last month, providing support for a Fed interest rate hike on Wednesday. The Bureau of Labor Statistics reported on Friday that nonfarm payrolls rose 235,000 in February, while analysts expected nonfarm employment to climb 196,000 in the reported month. Meanwhile, January's gain of 227,000 was revised up to 238,000. The construction sector contributed most to the February gain, adding 58,000 jobs. Over the past six months, the sector created an average of 177,000 jobs per month Data also showed average hourly earnings advanced 0.2%, falling behind analysts' expectations for a 0.3% increase. January's rise of 0.1% was revised up to 0.1%.
The jobless rate came in at 4.7% for February, marginally down from the prior month's 4.8% and in line with market forecasts. Over the past three months, the US private sector added an average of 209,000 jobs per month. The better-than-expected NFP report combined with rising inflation are likely to force the Federal Reserve to raise rates for the first time this year on Wednesday, during its policy meeting. Back in December 2016, the Central bank projected at least three rate hikes in 2017. Analysts suggest that the US labour market is at or close to full employment.
Upcoming events: US data set and the Fed
On Wednesday there are two times that market participants should look at the fundamentals. First of all at 12:30 GMT there will be a publication of US data, which will be covered by the Dukascopy research team. The package will consist of the US CPI, Core CPI, Retail Sales and Core Retail Sales. However, the main event of the month will occur at 18:00 GMT, as the Federal Reserve will announce the Federal Funds Rate and publish the FOMC Statement with the FOMC Economic Projections. Afterwards, at 18:30 GMT, the FOMC Press Conference will be held.
Gold remains near 1,200 mark
Daily chart: During the early hours of Wednesday's trading session the yellow metal's price fluctuated near the 1,200 mark. This tendency was established already on Tuesday morning, as the markets are expecting the Federal Reserve to announce its rate decision. The markets are expecting the Fed to hike the rate by 0.25%, and that would cause the US Dollar to strengthen, which would force the metal's price to fall. From a technical analysis perspective the commodity price is already positioned to fall down to the 1,186.87 level, where the closest support is located at.Daily chart
Hourly chart: The hourly chart for the yellow metal reveals that the bullion has increased its volatility, as in the last 24 hours there were strong periods of a decline and a surge. Moreover, it can be seen that the price is dictated by the fundamental bias rather than technical. It is proven by the fact that the commodity price with ease ignored the lower Bollinger band.
Hourly chart
Markets remain bullish
OANDA Gold traders have increased their bullish outlook, as open positions are 69.96% long on Wednesday, compared to 67.18% previously. Meanwhile, traders of SAXO bank have not changed their bullish outlook, as 68.57% of open positions are long, compared to 68.43% on Tuesday.