- 51% of all SWFX open positions are short
- Friday's Janet Yellen's speech did not move the metal off course
- Economic events to watch over the next 24 hours: US Initial Jobless Claims (Aug 27); US Unit Labor Costs (Q2); US PMI Manufacturing (Aug); US ISM Manufacturing; Fed's Mester Speaks;
Confidence among American shoppers improved unexpectedly in August, according to the Conference Board's monthly survey. The survey's Consumer Confidence Index increased to 101.1 points in the eight month of the year, compared to July's reading of 96.7, while market analysts anticipated a slighter acceleration to 97.1 in the reported month. Nevertheless, back in August 2015, the indicator was higher at 101.4 points. The survey is a closely-followed barometer of consumer attitudes towards business conditions, personal finances, jobs and short-term outlook. The data showed that 30% of respondents stated that business conditions were "good" in August, following July's 27.3%, whereas 18.4% stated conditions were "bad", unchanged from last month. 17.3% of respondents predicted an improvement in the next six months, compared to last month's 15.7%, while 11.1% predicted deterioration, down from July's 12.4%. The share of respondents expecting their incomes to improve remained resilient; however, the outlook on the job market was mixed. Consumer sentiment among Americans remained in the positive territory for more than a year. A reading of 90 or above indicates economic expansion. The US economy is mostly driven by consumer spending, which accounts for about 70% of all economic growth.
The Federal Reserve's (Fed) favorite measure of inflation held steady in the seventh month of the year, official data revealed on Monday. According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index (PCE), excluding the volatile food and energy components, rose 1.6% year-over-year in July, unchanged from last month, while market analysts anticipated a slight decrease to 1.5% in the reported month. On a monthly basis, the core PCE grew 0.1% in July, in line with analysts' expectations and the previous month's reading. The overall PCE advanced 0.8% on a yearly basis in the same month, following June's 0.9% and meeting market forecasts. The data also showed that personal spending climbed 0.3% on a monthly basis in July, down from June's upwardly revised 0.5% gain, whereas personal income jumped 0.4% on the same basis in July, compared to last month's upwardly revised 0.3% hike. Both readings came in line with analysts' projections. Federal Reserve Chairwoman Janet Yellen left the door open for a hike this year during her speech in Wyoming, arguing that the US economy created a lot of jobs lately and it is on a moderate growth path, despite recent disappointing economic data.
Upcoming fundamentals: US PMI Manufacturing, Jobless Claims and a Fed speech
With the start of a new month, data affecting the US Dollars strength will be out on September 1. First of all the US Initial Jobless Claims for the week up to August 27 will be released at 12:30 GMT, and they are expected to be a large number of 264,000. At the same time the Unit Labor Costs will be out for the second quarter and the data will be out as a change in percentage, compared on a quarterly basis. At 13:45 GMT the US PMI Manufacturing will be released for August, and fifteen minutes later, at 14:00 GMT, the ISM Manufacturing index for August will be out. Both of these indices are forecasted to be at 52.0, which indicates at growth of the sector. Last but not least, the working day will end with a speech given by the Fed's Mester at 4:25 GMT.
Gold trades below 1,310 on Thursday
Daily chart: The yellow metal is located between two weekly support levels at 1,310.87 and 1,301.13 without clear direction on Thursday morning. Previously, on Wednesday the metal fluctuated around the first weekly support level at 1,310.87 and ended the day's trading session at 1,307.70. On Thursday morning the bullion had slightly surged, as it continued a rebound from the support cluster located below, which occurred on Wednesday. However, the metal is most likely to bounce off the weekly S1 at 1,310.87 and continue its downward movement in accordance with the channel down pattern, in which it has been for the past nine sessions.Daily chart
Hourly chart: On the hourly chart for gold there is almost nothing to see, as it shows that the metal was almost flat above the 1,310 mark until 12:00 GMT. During that hour the ADP Employment Change for the US came out and the bullion had a correction to trade flat below the 1,310 mark. The yellow metal tested the weekly resistance at 1,310.87 by 1:00 GMT. However, gold failed to break it and resumed the downwards course of previous sessions.
Hourly chart
SWFX traders slightly bearish on Thursday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 66.67%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 59.74% of positions are long.