- SWFX traders are 52% bearish
- 63% of pending commands are to buy the metal
- The bullion opened at 1,254.68
- Upcoming Events: ADP Non-Farm Employment Change; ISM Non-Manufacturing PMI; FOMC Meeting Minutes
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: Independent data and FOMC
During Wednesday's trading session there are important events scheduled, which are likely to cause volatility in the financial markets from the side of the US Dollar. First of all at 12:15 GMT the ADP Non-Farm Employment Change will be published. This data release will be covered by the Dukascopy research team online. Afterwards, at 14:00 GMT the ISM Non-Manufacturing PMI will be published. However, the most important data release of the day will be the FOMC Meeting Minutes at 18:00 GMT.
Gold fluctuates above 1,250 mark
Daily chart: On Wednesday morning the yellow metal's price remained almost unchanged at the 1,255 mark. However, various clues were indicating that the bullion's price was about to decline down to the 1,250 mark, where a cluster of support was located at. The main reason for that hypothesis was the fact that the 200-day SMA was providing resistance at the 1,256.45 level, and gold clearly could not pass it. It is highly possible that the bullion's price will decline down to the combined support of the weekly PP and the 50.00% Fibonacci retracement level, respectively, at 1,249.67 and 1,248.96 during the day's trading session.Daily chart
Hourly chart: The hourly chart shows that there is an ascending channel pattern, which has been guiding the metal's price for almost a week. However, it still needs to be taken into account that the fundamental events are dictating the price of the metal. Although, from a technical perspective of the hourly chart, for the purpose of declining to the 1,250 mark the bullion's price should first pass the combined support of the lower Bollinger band and the 55-hour SMA.
Hourly chart
Markets remain bullish
OANDA Gold traders have reduced their bullish outlook, as open positions are 52.97% long on Wednesday, compared to 55.58% previously. Meanwhile, traders of SAXO bank have decreased the percentage of long positions, as 51.74% of open positions are long, compared to 53.89% on Tuesday.