- 54% of all SWFX open positions are short
- Friday's Janet Yellen's speech did not move the metal off course
- Economic events to watch over the next 24 hours: US PCE Price Index (July); US Personal Income (July); US Personal Spending (July)
New orders for US manufactured capital goods climbed in July for a second month, fresh figures revealed on Thursday. According to the Department of Commerce, demand for all durable goods rose 4.4% in the reported month, the highest reading since October 2015. Market analysts expected US orders for long-lasting goods to increase 3.4% in July, following last month's 3.9% upwardly revised drop. Excluding transport, orders jumped 1.5% in the same month, compared to June's 0.4% upwardly revised decline and surpassing the 0.4% market forecast. The gain in overall durable goods orders was mainly driven by a 10.5% rise in demand transportation equipment. Orders for civilian aircraft, which are extremely volatile month to month, advanced 89.9% in July, while orders for automobiles remained flat. Meanwhile, the rise in core durable goods orders follows an increase in oil and gas drilling activity. Other data released on Thursday showed the number of Americans filing for unemployment benefits dropped to 261,000 in the week ending August 20, following last week's 262,000 claims. Economic desks penciled in a slight acceleration to 265,000 in the reported period. This marks 77 consecutive weeks of initial claims below 300,000, the longest streak since 1973. The four-week moving average fell to 264,000 from 265,250 seen in the previous seven days.
The US economy expanded less than initially estimated in the Q2 of 2016, fresh data revealed on Friday. According to the second estimate released by the Commerce Department, the US GDP grew 1.1% over the Q2, whereas the first estimate suggested that the economy rose 1.2% in the reported quarter; however, the reading came in line with market forecasts. The US economy grew 0.8% in the Q1 and 1.0% in the first half of 2016. The downward revision was mainly driven by higher imports and weak spending by state and local governments. Meanwhile, Personal consumption growth was revised up to 4.4% from 4.2% reported earlier, the fastest pace since the Q4 of 2014. The data showed that corporate profits dropped 1.2% in the Q2, following the 3.4% gain seen in the Q1. Core personal consumption expenditures, which exclude volatile food and energy prices, rose to 1.8% from 1.7%. Separate data released by the Commerce Department showed the US trade deficit fell to a seasonally adjusted $59.3 billion last month, compared to June's $64.5 billion gap, whereas market analysts anticipated a slight drop to $62.3 billion in July. Exports jumped $2.9 billion, while imports declined $2.4 billion. Wholesale inventories rose 0.2% month-over-month and 0.3% year-over-year. Retail inventories fell 0.4% on a monthly basis, but increased 4.2% on an annual basis.
Upcoming fundamentals: US PCI and spending
The yellow metal might be affected by US fundamental data releases at 12:30 GMT, as at that time the US PCE Price Index for July will be released, as an annual change in percentage, and the core of the index will be out as a month-to-month and also annual change. At the same time, two additional fundamental data numbers will be published, as the US Personal Income and Personal Spending monthly changes for July will be out.
Gold trades below 1,320 level on Monday
Daily chart: The yellow metal moved below the 1,320 mark on Monday morning, as the metal is in its seventh consecutive session of decline. During this session, the commodity formed a downward aimed channel pattern, which indicated that the rate is set to reach at least the monthly S1 at 1,315.53 during today's trading session. Gold is most likely to rebound against this level, as it is also supported by the close by located weekly S1 at 1,310.87 and lower Bollinger band at 1,309.18. Previously, gold experienced high volatility on Friday, as Janet Yellen hinted at two possible rate hikes during 2016.Daily chart
Hourly chart: Just as any other financial instrument or commodity denominated in US Dollars, the yellow metal was affected by the speech of the Fed's chairwoman Janet Yellen's speech. Due to that, it was trading almost flat prior to the Jackson Hole Symposium. During the Symposiums second day, the yellow metal reached above the 1,340 level around 14:00 GMT. Afterwards the metal fell gradually until it found support in the monthly S1 at 1,315.53 at 1:00 GMT on Monday. Since then, the metal has been trading rather flat, as it was near 1,318 by 6:00 GMT.
Hourly chart
SWFX traders are bearish on Monday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 58.02%. In the meantime, SAXO bank clients are more bullish on the yellow metal, as 60.10% of positions are long.