- 52% of all SWFX open positions are short
- Markets are expecting Friday's information from the Fed
- Prices fluctuated around the 1,340 level since August 4
- Economic events to watch over the next 24 hours: US Durable Goods Orders (July); US Initial Jobless Claims (Aug 20); US PMI Services (August); US Jackson Hole Symposium
Existing home sales in the United States dropped more than expected last month after rising for four consecutive months, official figures revealed on Wednesday. According to the National Association of Realtors, sales fell 3.2% to a seasonally adjusted annual rate of 5.39 million units in July, compared to the preceding month's reading of 5.57 million, whereas market analysts anticipated a 0.3% decline to 5.52 million in the reported month. US home resales were 1.6% lower than a year earlier. Nevertheless, analysts view the drop in existing home sales as temporary and expect these sales to pick up soon. Home resales declined in the Northeast, the South and the Midwest; however, jumped 2.5% in the West. Meanwhile, the number of unsold homes on the market increased 0.9% in the seventh month of the year, whereas supply fell 5.8% and the median house price advanced 5.3% year-over-year to $244,100. Other data released by the Energy Information Administration on Wednesday showed a surprise increase in US crude oil inventories. According to the report, US crude stockpiles added 2.5 million barrels in the week ended August 19, following the 2.5% drop seen in the previous seven weeks and surpassing the 0.5 million-barrel fall forecast. After the release, Brent oil declined 1.5% and WTI dropped 1.8%, both trading below the $50 level.
New home sales in the United States rose more than expected in July, official data showed on Tuesday. According to the Department of Commerce, new home sales increased 12.4% to a seasonally adjusted annual rate of 654,000 in the seventh month of the year, reaching the highest level since October 2007. Meanwhile, the preceding month's reading was revised down to 582,000 from the originally reported 592,000 units. Market analysts penciled in a slight deceleration to 575,000 units in the reported month. July's surge probably exaggerates the housing market strength, as new single-family home sales are extremely volatile month-to-month; still, they were 31.3% higher than a year ago. The data also showed that new single family home sales jumped 40.0% in the American Northeast, as well as grew 1.2% in the Midwest region. Sales in the South rose 18.1% to their best level since July 2007, whereas the West region remained flat last month. Furthermore, inventories of new homes for sale dropped 2.9% to 233,000 units in July, the lowest level since November 2015. The median price of a new single-family home fell 0.5% year-over-year to $294,600. The US Dollar rose slightly after the release, trading at 1.1326 against the Euro, 100.11 against the Japanese Yen and 1.3186 against the British Pound.
Upcoming fundamentals: US data and Jackson Hole Symposium
Thursday's gold price will be set by the US Dollar's strength and the Jackson Hole Symposium press conferences. Most important US data will be released at 12:30 GMT, when the Durable Goods Orders for August and Initial Jobless Claims for August 20 will be out and covered by Dukascopy live on the webinar. Afterwards, at 13:45 GMT the US PMI Services index will also affect the US Dollar's strength. However, more important will be the Symposium happening in Jackson Hole, Wyoming, USA, which will be attended by central bankers, finance ministers, academics and financial market participants from the whole world.
Gold falls and increases volatility on Wednesday
Daily chart: The yellow metal stopped the fluctuations around the 1,340 level, in which it had been in for the past weeks, as the metal fell on Wednesday due to being pressured by the 20-day SMA from the downside. In the fall the bullion almost reached the weekly S2 at 1,322.63 and ended the session at 1,326.32. On Thursday morning gold has rebounded against the weekly support level and slightly surged, as it has encountered the 55-day SMA at 1,327.31. As the metal is pressured between the two levels, it is most likely going to remain unchanged during today's trading session.Daily chart
Hourly chart: On the hourly chart for gold it can be seen that the metal was fluctuating around the 55-hour SMA at 1,337 until 12:00 GMT on Wednesday. At 12:00 GMT, the 20-hour SMA moved in from the upside and forced the bullion to fall. Afterwards the yellow metal fell to the second weekly support line at 1,322.63 by 19:00 GMT. However, the metal has rebounded against it and is slowly surging, as it approaches the 20-hour SMA at 1,327.54 once more. It is most likely that the bullion will be squeezed between the two levels until additional resistance approaches form the upside in the form of the other SMAs or a fundamental data release changes the underlying worth of the commodity.
Hourly chart
SWFX traders remain bearish on Thursday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 64.72%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 62.59% of positions are long.