- 51% of all SWFX open positions are bullish
- Prices are fluctuating around 1,212
- Bullion's price has moved to the same levels as a week before (1,212)
- Economic events to watch over the next 24 hours: French, German and Euro zone Services and Composite PMI (May); US Trade Balance (April), Change in Nonfarm Payrolls (May), Unemployment Rate (May) and Average Hourly Earnings (May), Services PMI (May), Factory Orders (Apr); ISM Non-Manufacturing PMI (May); FOMC Member Brainard Speaks
According to the latest Labour Department release, the number of Americans applying for unemployment benefits unexpectedly dropped last week to a five week low, pointing to a tightening jobs market. The data for the previous week showed that 267,000 individuals filed new jobless claims. The following data revealed a decline of 1,000 claims from the prior week's level of 268,000. Moreover, the streak of initial jobless claims below 300k resumes a 64 consecutive weeks' period, thus showing the longest since 1973. Moreover, the data was better than the consensus estimate of 270k new claims. Continuing jobless claims, in turn, for the week ended May 21 went up to 2.172 million from 2.160 million in the preceding week. Moreover, the previous week's figure was revised down from 2.163 million. Economists had expected continuing claims to decline further reaching the 2.150 million mark. Overall, a Labour Department analyst revealed that there were no special factors which have led to the following last week's claims data. However, claims for Tennessee, Virginia, Wyoming, Puerto Rico and Hawaii were estimated because of the Memorial Day holiday. Also it could be added, that last week's claims report has no impact on the employment report for May, which is scheduled to be published today
In line with a drop noted in the preceding month, a report on consumer confidence released on Tuesday showed that the negative tendency is developing. According to the Conference Board, the confidence unexpectedly diminished further in May, slipping to its lowest level in six months, reaching 92.6 mark from a revised 94.7 in April. Such a release is well below the postrecession high of 103.8 set in the beginning of the previous year. Meanwhile, majority of economists had expected the index to advance. Following data signalise that Americans continue to be cautious about the economy despite the seven years' recovery phase. However, their spending habits show that they are more upbeat than the confidence report suggests. In April, for example, consumer spending rose at the fastest rate since 2009. Also, consumers were relatively less optimistic about the short-term outlook, with the expectations index dipping to 79.0 in May from 79.7 in April. The proportion of consumers expecting business conditions to improve over the next six months increased from 13.8% to 15.1%. Overall a strong dollar and poor global demand has hurt exports while upcoming Novembers' presidential election also is contributing to domestic economic uncertainty. Therefore, consumers remain cautious about the outlook for business and labour market conditions.
Upcoming fundamentals: US employment and trade balance data
The US Dollar's strength today will dictate the gold prices and possibly move it into one or another direction. There are three major data releases at 12:30 GMT and one later in the noon at 14:00 GMT. For midday, publishing is rounded up with change in nonfarm payrolls, trade balance and unemployment rate. Later in the day the ISM non-manufacturing composite index will be published. All in all, most data is forecasted to improve by experts with the exception of US trade balance, which should decrease by $1.5 billion
Gold erodes two-day gains on Thursday
Daily chart: The yellow metal looks almost stuck in the daily chart, as with the recent gains it is still at the low level of 1,212, which was already reached last week on Friday. At the moment the bullion is gaining strength against the US Dollar. However, if it continues to go up, it faces the 100-day SMA at 1,222.07 and weekly pivot point at 1,224.97. An alternate to appreciation of the metal could be a further decline to at least the weekly S1 at 1,193.95.Daily chart
Hourly chart: The bullion went up at the start of Thursday and provided a good perspective for bulls. However, when the yellow metal reached levels around 1,217 it erased all daily gains almost in an hour. The losses continued into Friday and the metal fell to 1,206.87, where it touched the first daily support, which is located exactly at that point. At the moment gold is rebounding and has passed the daily pivot point at 1,212.25. Above it are located the 55-hour SMA at 1,213.35 and daily R1 at 1,214.94.
Hourly chart
SWFX market sentiment turns positive on gold
Meanwhile, OANDA and SAXO Bank clients are still more positive than SWFX traders with respect to the bullion, precisely in 67.94% and 64.90% of all cases, correspondingly, in the morning on June 3.