- Bulls remain in the majority with 53% of all trades
- Weak NFP numbers refocused market attention to the upside
- Daily indicators suggest the bullion is too oversold at the moment
- Economic events to watch in the next 24 hours: Spanish, Italian, French, German and Euro zone Services PMI (Sep); Euro zone Retail Sales (Aug); US Services PMI (Sep), Labour Market Conditions Index (Sep) and ISM Non-Manufacturing PMI (Sep); UK Services PMI (Sep); New Zealand NZIER Business Confidence (Q3); Australian Trade Balance (Aug); RBA Interest Rate Decision and RBA Statement
The US economy posted another month of weak job growth in September, raising new doubts the economy may not be strong enough for the Federal Reserve to raise interest rates by the end of this year. According to the Labour Department, payrolls outside the farming industry added 142,000 last month and August growth figures were revised sharply lower to only 136,000, instead of the initially reported 173,000. July's increase the US hiring was also revised down to 223,000 from the previously reported 245,000. Generally, over the past three months, payrolls grew just 167,000, which is the weakest print since the period of December 2013 to February 2014. Meanwhile, the unemployment rate remained at a seven-year low of 5.1% in the ninth month of the year after falling from 5.2% in August.
Meanwhile, after a decline in July, Australian retail sales jumped up again, the Australian Bureau of Statistics reported on Friday. More precisely, the total value of retail sales gained a seasonally adjusted 0.4% on a monthly basis in August 2015, following a fall of 0.1% in July. The August figure was in line with analysts' forecasts. The total retail spending in the eighth month of the year accounted for A$24.4 billion, up from July's A$24.3 billion. According to ABS, the sector that has contributed the most to the growth in retail spending was food retailing, which rose by 0.6%.
Upcoming fundamentals: RBA expected to hold interest rates unchanged
Despite hints of a possible interest rate cut, the Reserve Bank of Australia is unlikely to soften the stance tomorrow. Analysts suggest the benchmark rate will remain flat at 2.00%. The decision will be known by 3:30 GMT on Tuesday. Meanwhile, Australia's trade deficit is also projected to be broadly unchanged for the month of August at around A$2.4 billion. Other fundamentals in course of the next 24 hours will include the UK and US services PMI indicators at 8:30 GMT and 14:00 GMT, accordingly.
Gold erases three-day losses, surges to 1,138
After initial jump, which took place immediately after the US report on non-farm payrolls, the bullion managed to hold gains and close around the 1,138 mark on Friday. Gold pierced through a number of important resistance lines during that bullish move. On top of that, the metal eroded all losses that have occurred since Sep 29. In case we see the price remaining upbeat on Monday, our expectations will refocus on the topside. Bulls are aiming at the 100-day SMA (1,144) at the moment, which acts as an intermediate supply before the Sep high at 1,156.Daily chart
Even though little signs were calling for a substantial surge in gold's value on Friday, now the outlook turns back to the positive side. Confirmation of the bullish projection requires Monday's closing price above the 200-hour SMA at 1,130. Moreover, this level is underpinned by the 2014 low from the north.
Hourly chart
SWFX bullish share cools down to 53%
In the meantime, OANDA bullish share plunged by almost ten percentage points from 69% to 59.62%, while SAXO Bank long traders' majority decreased from 65% to 59%.