- 53% of all SWFX open positions are bearish
- Prices fluctuate around the 1,265 level
- Gold touched the 1,270 level on Thursday
- Economic events to watch over the next 24 hours: US UoM Confidence Preliminary (June); Baker Hughes US Rig Count Change Crude Oil (Jun 10)
First-time jobless claims unexpectedly dropped during the last week while the number of Americans already receiving benefits declined to an almost 16-year low, pointing to sustained strength in the labour market. According, to the US Labour Department, the initial claims for state unemployment benefits declined 4,000 slipping to a seasonally adjusted 264,000 for the week ended June 4. Moreover, this drop is below the consensus of economists who expected the number to rise to 270,000. This was a welcome bit of news after last week's cluster munch. Despite, the May's hiring slowdown, now data is below the 300,000 mark, already for 66 straight weeks, showing the longest streak since 1973. However, still, the hiring slowdown shows a sluggish US economy. Moreover, the US growth came in at an annual rate of 1.4% from October through December and 0.8% from January through March. Moreover, a strong Greenback has hurt American exporters by making their products more expensive overseas, while low oil and natural gas prices have forced energy companies to slash investment. Overall, the report indicates companies remain reluctant to reduce headcounts even after figures last week showed May was the worst month for hiring in almost six years.
According to the latest report, the US crude futures advanced for a third consecutive day on Wednesday, reaching new 2016 highs. The US benchmark posting a nearly 11-month closing record. On the New York Mercantile Exchange, West Texas Intermediate crude for July delivery added +0.62% and rose 87 cents, or 1.7%, to settle at $51.23—showing the highest close for a nearby contract since July 15. Meanwhile, August Brent crude, increased 0.42% the global oil benchmark, reaching $1.07, or 2.1%, to finish at $52.51 a barrel on London's ICE Futures exchange, its highest close since October. According to the analysts, futures were affected in a positive way boosted by reports of another attack on oil facilities in Nigeria. They were also buoyed by data from an industry trade group, the American Petroleum Institute, which on Tuesday said that US crude inventories had fallen by 3.6 million barrels. Also, crude found support from continued supply disruptions, as well as China import data and a decline in crude inventories. By the way, prices have nearly doubled since hitting 13-year lows earlier in this year mostly since companies have slashed spending on new drilling, and unplanned outages in Nigeria and Canada helped reduce the global oversupply of crude.
Upcoming fundamentals: Michigan's consumer confidence and US rig count.
Today, most attention regarding commodities is et on the US dollar affecting data and the Baker Hughes US crude oil rig count change. First will be released the University of Michigan Confidence Preliminary at 14:00 GMT, which is the US consumer confidence indicator released by the university twice a month and affects the US Dollar. Later on in the day, in the US the Baker Hughes Rig Count will be released at 17:00 GMT, indicating whether crude oil production has increased or declined in the US for the previous week. Usually this indicator affects all commodity prices, as they are more or less correlated.
Gold increases gains to 1,265 on Thursday
Daily chart: Gold continued scoring gains on Thursday, as the US Dollar lost its value. The yellow metal previously had reached the level of 1,260 on Wednesday and it increased its gains to 1,265 on Thursday. At the moment, the metal is trading at 1,264.91, as a decline is observed on Friday morning, which might be profit taking from the recent week of gains. However, the decline faces a weekly R1 at 1,259.11 and if the pair passes the resistance, then it could go low as the monthly pivot point at 1,239.18. In the meantime, aggregate technical indicators support the forecast of a decline for today.Daily chart
Hourly chart: On the hourly chart it can be seen that the bullions decline started around 19:00 GMT with the first red candle. Right before the start of the decline, the yellow metal reached the 1,270 level. However, since then gold slowly declined and has just passed the middle Bollinger band at 1,265.92, against which it struggled since midnight. Next for the decline is the 55-hour SMA at 1,260.76 and the lower Bollinger band just close by at 1,260.12 and, if these two supports don't stop the decline, the weekly R1 is just below at 1,259.11.
Hourly chart
SWFX traders increase bearish sentiment on Friday
Meanwhile, OANDA and SAXO Bank clients are bullish with respect to the bullion, precisely in 60.63% and 51.79% of all cases, correspondingly, in the Friday morning on June 10.