- 54% of all SWFX open positions are long
- Pending orders at 56% long
- Gold opened Monday's session at 1206.15
- Economic events to watch over the next 24 hours: All quiet on Monday
US consumer prices see the biggest increase in six months in October amid higher gasoline and rent costs. According to the US Department of Labor, the Consumer Price Index advanced 0.4% last month, following September's gain of 0.3%. On a yearly basis, consumer prices grew 1.6% in October, the largest annual increase since October 2014, up from the preceding month's 1.5%. Both readings came in line with analysts' expectations. Nevertheless, the so-called core CPI, which excludes prices for volatile items such as energy and food, rose 0.1% in the reported month, unchanged from September, while market analysts anticipated a slight increase to 0.2%. Year-over-year, core consumer prices fell to 2.1% in October, following the prior month's 2.2% gain. Higher inflation as well as the strong labor market are likely to encourage the Federal Reserve to raise its key interest rates at its next meeting in December. The Central bank increased its key overnight interest rate in December 2015 for the first time since the global financial crisis. The Labor Department said gasoline prices surged 7.0%, up from September's 5.8%, whereas food prices remained unchanged. Within components of the core CPI, rents rose 0.4%, while medical care costs were unchanged. The price of prescription drugs rose 0.2%.
US retail sales posted a better than expected increase last month, suggesting economic strength and increasing chances for a December interest rate hike. The US Department of Commerce said on Tuesday retail sales climbed 0.8% on a monthly basis in October, following September's upwardly revised gain of 0.5% and surpassing the 0.5% increase forecast. Year-over-year, retail sales grew 4.3% last month. Excluding volatile items such as motor vehicles and parts, retail sales advanced 0.8% in October, whereas economists expected them to increase just 0.5%. Meanwhile, the preceding month's reading was revised up to 0.7% from the originally reported rise of 0.5%. The October stronger than expected retail sales supported the view that the Federal Reserve will raise interest rates at its next policy meeting on December 13-14. The last time the Fed increased its key rate was December 2015, and kept its steady since then because of low inflation rates. Back in the Q3, the US economy expanded at an annual rate of 2.9% and it is set to grow 3.1% in the Q4, according to the latest economic growth forecasts released by the Atlanta Fed. As a result, the US Dollar jumped markedly against the Euro, with the EUR/USD pair declining to $1.0733 from $1.0759 ahead of the release.
Upcoming fundamentals: All quiet on Monday, except one speech
Sometimes news from the EU influence gold prices. The President of the ECB, Mario Draghi, already spoke on Friday at 8:30 GMT. However it seems that he forgot to say everything. That is because Mr. Draghi has scheduled another speech at 16:00 GMT on Monday. It remains, however, unlikely that the statements could shake the bullion significantly, as the US fundamentals dominate the markets.
Gold near 1,200 mark on Monday
Daily chart: The yellow metal edged higher on Monday morning, as it approached the resistance put up by the weekly PP at 1,214.32. However, it seemed like a temporary surge, as the US Dollar was poised to continue to gain and with it decrease the commodity price. It is most likely that the metal will fall by the end of the day's trading session and reach the support cluster located below it around the 1,200 level. The cluster consists of the second monthly support at 1,200.77, May low level at 1,199.58 and the weekly S1 at 1,195.64.Daily chart
Hourly chart: By examining the hourly chart for the yellow metal, an ascending channel can be seen. The channel formed in the aftermath of the drastic fall, which occurred from 00:00 to 01:00 GMT on Friday. The channel is aimed directly at the newly calculated weekly PP at 1,214.32, and that is where it is most likely going to end being relevant.
Hourly chart
SWFX sentiment unchanged
OANDA open long positions have increased and are at 79.02%, compared to 76.86% on Friday. SAXO bank traders remain long, as on Monday 67.69% of traders bet the metal will surge, compared to 64.25% during the previous session.