XAU/USD unable to recover

Source: Dukascopy Bank SA
  • Share of long trades decreased further to 56%
  • Main resistance is located around 1,105
  • Key demand can be found at 1,071
  • Economic events to watch in the next 24 hours: Italian, French, German, Euro zone, UK, US Services PMI (Jul), Euro zone Retail Sales (Jul), US ADP Employment Change (Jul), Trade Balance (Jul) and Crude Oil Inventories (Jul 31), Australian Employment Change/Unemployment Rate (Jul), Swiss CPI (Jul)

© Dukascopy Bank SA
Commodities traded in green on Tuesday, as all of them managed to show at least some positive daily change. Among them, oil prices have partly erased losses from Friday and Monday, when a plunge was reaching 3-4%. Yesterday, however, an increase amounted to just 1%; therefore, any stronger recovery is an issue for the long-term. Mentioning other commodities, natural gas was the day's best performer with a gain of 2%, while corn and gold have picked up just slightly by about 0.2%.

Gold slid to its lowest level in more than five years on Wednesday as the Dollar gained after the Fed official said that the US central bank is more likely than not to raise interest rates as early as in September. Atlanta Fed President Dennis Lockhart said that there should be a significant deterioration in the US economy to reconsider his decision not to back a rate hike next month. Meanwhile, holdings of the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, declined further on Tuesday to 21.56 million ounces, the hitting lowest level since September 2008.


Meanwhile, New Zealand's unemployment rate climbed as the number of new jobs created failed to meet a growing working population driven by record migration. The jobless rate rose to a seasonally-adjusted 5.9% in the second quarter, compared with 5.8% in the three months through March, according to Statistics New Zealand. Employment increased 0.3% in the measured quarter, against economists' expectations for 0.5% jobs growth. The indicator also lagged behind the 0.7% growth of the working population for the first time since the third quarter of 2012. Job growth was strongest in the manufacturing sector, followed by construction.

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Upcoming fundamentals: Australian labour market data to show mixed numbers for July



A bunch of important labour market statistics is expected to be published in Australia at 1:30 GMT tomorrow. While the number of people in work is estimated to grow by 12,500 in July, the jobless rate has probably increased from 6% to 6.1% the same month. Meanwhile, Swiss prices are forecasted to fall deeper into deflation territory, with the annual CPI projected to decrease from -1% in June down to -1.1% last month. A number of European countries and the US are going to publish the PMI indicators for services' sectors today. The gauges for France, Germany and US will most likely stay above the threshold of 50 points.


XAU/USD unable to recover

Gold ended trading flat on Tuesday, despite some attempts to rebound above the weekly pivot point at 1,092. Therefore, the price continues hovering around its lowest level in five years at 1,085. Both short and medium-term outlooks are not about to be changed from negative to neutral or positive. Daily technical indicators suggest the XAU/USD cross will suffer continuous losses, while bears seem to be preparing for this scenario in order to push the bullion down to Jul 20 low at 1,071.

Daily chart
© Dukascopy Bank SA

In the one-hour chart the bullion's horizontal development is more visible at the moment. The future scenario is inevitably biased in favour of bears, as they may receive some extra momentum from the 200-hour SMA at 1,092 and local highs just above the 1,100 mark.

Hourly chart
© Dukascopy Bank SA

Bulls losing advantage at SWFX market

Sentiment with respect to the precious metal worsened further in the past 24 hours. The portion of long open positions slid from 59% to 56%, and it remains at the lowest level in two months.

In the meantime, OANDA share of bulls stays at 65.79% of all current positions, while SAXO Bank traders are also firmly optimistic towards gold at the moment, as there are 67% of bullish trades opened by Wednesday morning.















Spreads (avg,pip) / Trading volume / Volatility


Average forecast for the end of November is 1,150

Meanwhile, traders, who were asked regarding their longer-term views on gold between Jul 4 and Aug 4 expect, on average, to see the metal around 1,150 by the end of November. Though 43% of participants believe the price will be above this mark in ninety days. Alongside, 41% of those surveyed reckon the price will trade in the range between 1,150 and 1,100 by the end of November of this year.

© Dukascopy Bank SA

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