- 56% of all SWFX open positions are short
- The yellow metal remained almost unchanged by the end of the Election Day session
- The recent fluctuations were caused and dictated by the US presidential election
- Economic events to watch over the next 24 hours: US Unemployment Claims; FOMC Member Bullard Speech
Donald Trump's election as the 45th president of the United States sent shock waves across the world. His victory allowed the Republic Party to maintain the Senate, as well as win the White House. According to the final figures, in the presidential race of 2016 Trump won 276 electoral votes. Despite the post-election uncertainty, the US economy is set to continue its expansion at a rate of 2%. Moreover, analysts still expect a rate hike from the Federal Reserve in December, as markets are likely to stabilize ahead of the monetary policy meeting. Once the news broke, the Mexican Peso dropped more than 13%, hitting its overnight low, whereas the price of gold advanced 4.9% to $1,337.4 per ounce. European stock markets fell around 2.3%, compared to a 9% plunge after Britain's decision to leave the European Union. However, European stocks managed to finish higher, with the FTSE rising around 1% after falling 2% at the start of the trading day. Separately, the Energy Information Administration reported on Wednesday that US crude oil inventories increased 2.4 million barrels in the week ended November 4, following the preceding week's rise of 14.4 million barrels and surpassing the 1.3 million barrel gain forecast.
US private companies added fewer than expected jobs last month, whereas the unemployment rate improved slightly, the October Non-Farm Payrolls report showed on Friday. According to the Bureau of Labor Statistics, the US economy created 161,000 new jobs in the reported period, while market analysts expected nonfarm payrolls to increase by 174,000. Meanwhile, the September gain was revised up to 191,000 from the originally reported 156,000. However, the odds of a December rate remained quite high, despite today's disappointing jobs report. Furthermore, average hourly earnings advanced 2.8% and 0.4% on annual and monthly basis, respectively, while average weekly remained unchanged at 34.4 last month. The unemployment rate declined unexpectedly to 4.9% in October, following the preceding month's 5.0%. After the release, the US Dollar declined slightly against other major currencies, trading at 1.1111 against the Euro and 103.10 against the Japanese Yen. Separately, the Bureau of Economic Analysis said on Friday that the US trade deficit narrowed to $36.44 billion in the same month from September's gap of $40.46 billion, which was revised up from the originally reported $40.70 billion deficit. Economists expected the US trade gap to decrease to $37.80 billion during October.
Upcoming fundamentals: US Unemployment and FOMC's Bullard
There are two notable events scheduled for today, which might affect the strength of the US Dollar and subsequently the yellow metal's price. First will be the US Unemployment Claims release at 13:30 GMT. However, more important might be the speech, which will be given by FOMC member Bullard at 14:15 GMT, as he might indicate what will happen with the FED under Donald Trump.
Gold is back at pre-election levels
Daily chart: On early Thursday morning the yellow metal's price headed higher, as the bullion reached the 1,288 level. Previously, on US Election Day the bullion's price jumped and hit the 1,337 level during the session. However, as the markets calmed down after the first media and previously biased forecast induced hysteria, the yellow metal moved lower and ended the day's trading session at 1,280.82, which is only 0.16% higher than the opening. Once could say that the metal remained flat during the election. Although, it is still possible that the bullion will rise, as president Trump reveals his plans.Daily chart
Hourly chart: The hourly chart for the bullion reveals that the election surge might have been stopped by the second weekly resistance. Afterwards, the bullion fell and actually revealed, which levels of significance have strength, as each one of them hindered the fall. They were the 1,300 level and the weekly S2 combined with monthly PP around 1,280. However, at the end the rate was reversed by the large scale trend's lower trend line. The whole thing is still consistent with the patterns, due to which this could not be called a Brexit like event.
Hourly chart
Traders remain bearish
OANDA open long positions have increased to 78.62%, compared to 77.04% on Tuesday. SAXO bank traders remain long, and have increased their bullish positions to 65.57%, compared to 55.22% the previous session.