- SWFX traders are neutral
- 64% of pending commands are to buy the metal
- The bullion opened at 1,252.13
- Upcoming Events: Draghi's speech
US manufacturing activity rose in line with analysts' expectations last month, a private survey revealed on Monday. The Institute for Supply Management reported its Purchasing Managers' Index for the manufacturing sector came in at 57.2 in March, down from the preceding month's 57.7. However, the figure met market forecasts. Out of the 18 industries, 17 reported growth last month. Data also showed that the sharp oil price rebound contributed most to the manufacturing sector recovery over the past several months. Nevertheless, some manufacturing companies projected activity growth to remain flat in the upcoming months. The New Orders Index came in at 64.5 points, following the February reading of 65.1. However, the gauge if new orders remained at its three-year highs, suggesting that the sector would remain on a solid growth track. Manufacturers also pointed to rising raw material prices, providing further evidence that inflationary pressures continued to build in the US economy. Meanwhile, Markit reported that the group's PMI for the US manufacturing sector dropped to 53.3 last month, the lowest in six months, compared to the prior month's 53.4, whereas analysts anticipated a slight rise to 53.5 points. Furthermore, Markit said that the New Orders Index came in at its slowest pace since October.
Thursday's data also showed consumer spending advanced 3.5% during the last quarter of 2016, up from the initially reporter 3.0% growth rate. Furthermore, domestic demand climbed 3.4% in the Q4 of 2016, the fastest pace of growth in two years, as imports posted a 9.0% jump, the biggest since the Q4 of 2014. Other data released on Thursday revealed that initial jobless claims dropped 3,000 to a seasonally adjusted 258,000 in the week ending March 25, remaining below the 300,000 level for 108 consecutive weeks.
Upcoming events: ECB Draghi's speech
While no high impact fundamental news are due for the US Dollar, the EUR might spill some volatility into the XAU/USD market in case 10:30 GMT brings some surprises as ECB President Draghi speaks. Risk on sentiment might direct funds into the Bullion and uncertainty before could also lead to some fluctuations.
Gold Green but upside cut sharp
Daily chart: Despite the early reading, Gold managed to show a solid 392 green pips on the daily chart, suggesting that bullish momentum prevails, but the resistance cluster at 1,256.77/1,257.69 is most likely to limit upside potential due to the multiple tests that have failed at the area before. We will look for the pair to remain squeezed in between the aforementioned resistance and the 1,249.67/1,248.96 zone. In general it looks like XAU/USD is in the process of establishing a trading range with decent support at 1,242.20.Daily chart
Hourly chart: The hourly chart, however, displays some of the flaws to a logic based on a strongly bullish scenario. Gold has sketched a rising wedge with decently confirmed trend-lines, meaning that highs are losing amplitude and that some red-zone risks should not be overlooked. The range for the current motion is not tightly-bound, on the contrary – levels both on the upside and below lie more than 150 pips away from the current reading at the aforementioned 1,257.69 and the 1,253.02 zone. Strong supply, however, lies far below at 1,249.67/1,248.19.
Hourly chart
Markets remain bullish
OANDA Gold traders remain with a bullish outlook, as open positions are 55.58% long on Tuesday, compared to 54.96% previously. Meanwhile, traders of SAXO bank have decreased the percentage of long positions, as 53.89% of open positions are long, compared to 54.75% on Monday.