- Share of long trades rose from 56% to 59%
- Main resistance is located around 1,103
- Key demand can be found at 1,071
- Economic events to watch in the next 24 hours: German, UK and French Trade Balance (Jun), US Non-Farm Payrolls/Unemployment Rate (Jul), Canadian Net Change in Employment/Unemployment Rate (Jul), Building Permits (Jun) and Ivey PMI (Jul)
Gold was largely flat near its lowest level since 2010 on Friday and headed towards a seventh straight weekly decline, the longest such streak since 1999, ahead of US labour market report that may determine timing of interest rate hike by the Fed. A strong jobs data would fuel speculation the US central bank will lift rates next month, which is likely to pull non-interest-bearing gold to fresh lows. Economists predict the world's number one economy added 223,000 jobs in Jul. US job creation has exceeded 200,000 in 14 of the last 16 months.
The Reserve Bank of Australia delivered a more positive assessment of the nation's economy, saying the monetary policy was likely to remain unchanged for the time being. While the central bank downgraded its economic growth outlook for the current financial year by half a percentage point, it estimated growth pace to accelerate to between 3% and 4.5% by December 2017. Additionally, in its quarterly statement on monetary policy, the central bank said the unemployment rate would peak below the RBA's previous projected high of 6.5%.
Meanwhile, the Bank of Japan kept its optimistic economic assessment and massive stimulus programme unchanged, reflecting its belief that inflation will pick up toward 2% price growth without extra monetary easing. In line with economists' expectations, the BoJ reiterated its pledge to raise base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen via purchases of government bonds and risky assets.
Upcoming fundamentals: Canadian all-sector PMI to retreat in July
According to the mean expectation, the PMI indicator for Canada released by the Richard Ivey School of Business is going to decline substantially in July. While in June the all-industry activity index stayed at 55.9 points, last month it has probably deteriorated as low as just 51.8 points, following depressing GDP figures earlier in the previous week.
XAU/USD stuck in between 1,092 and 1,080
Possibly after today's US report on jobs the XAU/USD cross will finally decide to move at least beyond its nearest technical levels, which are represented by the weekly pivot point and weekly S1 at 1,092 and 1,080, accordingly. However, as mentioned in our previous reports on gold, the metal will be focusing more on either 1,103 or 1,071 in the medium-term. Daily technical studies are sending signals to sell the precious metal. On the other hand, Stochastic sees gold oversold, as it is giving positive indications in the weekly and monthly time frames.Daily chart
In the one-hour chart the bullion's horizontal development is more visible at the moment. The future scenario is biased in favour of bears, as they may receive some extra momentum from the 200-hour SMA, currently at 1,090, and local highs just above the 1,100 mark.
Hourly chart
SWFX sentiment kicks off recovery stage
In the meantime, OANDA share of bulls stays at 63% (-4%) of all current positions, while SAXO Bank traders are also firmly optimistic towards gold at the moment, as there are 66% of bullish trades opened by Friday morning.