- 56% of all SWFX open positions are long
- 62% of pending commands were to buy the metal
- The bullion opened at 1,172.22
- Upcoming Events: Nothing notable
The US economy created less jobs than expected in the last month of 2016, disappointing markets. The US unemployment rate rose in line with analysts' expectations from 4.6% to 4.7%, while the participation rate climbed from 62.6% to 62.7%. The report also showed US nonfarm payrolls advanced 156,000, while markets anticipated a gain of 177,000, following the previous month's increase of 178,000. Official data published by the Bureau of Labor Statistics showed manufacturing employment advanced 17,000 in December, despite small decreases in two previous months. In the meantime, there was also a slight fall in construction jobs and decline of over 15,000 in temporary help-services jobs. Nevertheless, government employment increased 12,000. In the meantime, the BLS said the Average Earnings Index jumped 0.4%, compared to a 0.1% decrease in November, which boosted the annual rate from 2.5% to 2.9%, the strongest gain since June 2009. Despite mixed economic indicators, the data is likely to maintain confidence in the job market and analysts' expectations for the Federal Reserve's rate hikes in 2017.
After the report, the US Dollar strengthened immediately. The EUR/USD pair dropped to 1.0550, while the USD/JPY held steady at 116.50.
Upcoming fundamental releases: Quiet Monday
Two macroeconomic data releases can affect the price of the yellow metal on Monday through the strength of the US Dollar. First is the US Labor Market Conditions Index at 15:00 GMT. Second is the planned release of the US Consumer Credit at 20:00 GMT. However, both of these are minor data releases, and there has to be a drastic discrepancy with the forecasted data for them to cause a large fluctuation.
Gold stops gaining
Daily chart: After three consecutive trading sessions of gains the yellow metal stopped the surge and lost value during Friday's trading session. On Monday morning the commodity price fluctuated near the previous closing price near the 1,175 mark. By looking at the technical indicators and various clues, it can be assumed that the bullion is set to depreciate down to the 1,167.75 level, where the weekly PP is located at. Afterwards, the metal is likely to rebound and move back up to the opening price level.Daily chart
Hourly chart: An examination of the commodity price on the hourly chart reveals additional information. First of all it can be clearly observed that the bullion bounced off the monthly R1, which is located at 1,184.64 on Thursday at 16:00 GMT. This high level, connected with the high of 1,182.64 achieved at 13:00 GMT on January 6 reveals the upper trend line of a descending channel on the hourly chart. The lower trend line can be assessed by adding a parallel line with a reference point at 1,171.65 at 18:00 GMT on January 6. The metal is set to trade in accordance with this channel.
Hourly chart
SWFX traders still optimistic
OANDA Gold traders remain largely optimistic regarding the Bullion, as open positions were 80% long. Meanwhile, traders of SAXO bank have increased their bullish outlook in terms of prospects for the metal, as today showed 67.95% of traders betting the metal will surge, compared to 61.69% during the previous session.