- 53% of all SWFX open positions are bearish
- Prices have reached 1,330 level
- Gold surged on release of the UK Referendum results and following uncertainty
- Economic events to watch over the next 24 hours: US PMI Manufacturing (June); US ISM Manufacturing (June); Fed's Mester Speaks; Baker Hughes US Rig Count Change Crude Oil (July 1)
The number of Americans filing for unemployment benefits rose last week, but remained below a level associated with a healthy labour market. Jobless claims increased by 10,000 to 268,000 in the week ended June 25, a report from the Labour Department showed. Economists had expected jobless claims to edge up to 266,000 from the 259,000 originally reported for the previous week. Continuing claims decreased for the third week in the last four. Meanwhile, the Labour Department reported the less volatile four-week moving average came in at 266,760, unchanged from the previous week's revised average of 266,750. The report also showed that a reading on the number of people receiving ongoing unemployment assistance fell by 20,000 to 2.120 million in the week ended June 18th, which is lower than the 2.15 million print penciled in by forecasters. Economists suggest this is a sign that the poor pace of jobs growth in April and May, which prevented the Federal Reserve from raising rates this month, was likely an aberration. It is unlikely for the labour market to slow down abruptly without a corresponding increase in layoffs, their reasoning goes. The next monthly employment report is scheduled for July 8.
The Canadian economy grew in line with expectations in April, as strength in manufacturing and utilities was tempered by a steep decline in nonconventional oil extraction. Canadian April's real GDP edged up 0.1% after contracting 0.2% and 0.1% in March and February, respectively, Statistics Canada reported. The freshly released figures matched analysts' expectations. Meanwhile, the economy grew 1.5% on an annual basis, slightly beating the market projection of 1.4%. Regardless, the modest gains met market expectations, economists warned that it was a temporary reprieve, as the impact of wildfires in Alberta weighed heavily on Q2. Canada's monthly GDP figures were the last set of data released prior to the Bank of Canada's interest rate announcement in July. The main issue worrying economists are the effects of the Alberta wildfires on Q2 growth, as April's marginal recovery will not be enough to save Canada from an extremely weak Q2. However, economists remain confident that the BoC will stay the course and keep its monetary policy unchanged, arguing that a more shocking event is needed to trigger a change in the current 0.5% key interest rate.
Upcoming fundamentals: US PMI Manufacturing and crude oil rig count
Just like before the Brexit gold will be impacted from the other side of the Atlantic on Friday, as in the US the PMI Manufacturing will be published at 13:45 GMT, and it will be followed by the ISM Manufacturing fifteen minutes later at 14:00 GMT. In addition, the Fed's Mester is set to give a speech at 15:00 GMT. Last but not least, all commodities will be affected by the weekly published Baker Hughes US Rig Count Change for crude oil at 17:00 GMT.
Gold reaches new height of 1,330 on Friday
Daily chart: The yellow metal continued to surge on Thursday after booking gains on Wednesday. At the moment, on Friday the bullion already scored more than the previous day, as the metal has surged from 1,321.90 to 1,330.00 by 5:30 GMT. On its way northward, gold is not facing any resistance up to the level of 1,365.71, where the weekly R1 is located at. However, the metal might struggle with the upper Bollinger band, which is now at 1,342.33.Daily chart
Hourly chart: The hourly chart shows that the yellow metal, just like on Wednesday, steadily scored gains on Thursday. As the metal passed all resistances put up by the simple moving averages, it is bending the upper Bollinger band and moving unopposed to the weekly R1 at 1,365.71. Meanwhile, aggregate daily technical indicators also support the forecast that the bullion will surge today. In addition, the monthly forecast also predicts a surge for the metal this month.
Hourly chart
SWFX trader sentiment still unchanged
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 65.08%. In addition, SAXO bank clients are also bullish on the yellow metal, as 50.59% of positions are long.