- 57% of all SWFX open positions are bearish
- Prices touched 1,350 level
- Gold surged on release of the UK Referendum results and following uncertainty
- Economic events to watch over the next 24 hours: US Independence Day; RBA Rate Statement
Factories across the US reported on a strong jump in production during June, being spurred by a accelerated foreign demand for US goods. According to the Markit release, the purchasing managers' index went up to 51.3 last month, up from 50.7 in May, thus reaching a three-month high. However, it is worth to point out, that the data was revised down slightly from the flash estimate of 51.4. The following numbers show that weakness in the April and May readings confirms that the second-quarter overall was the weakest since the third quarter of 2009, but there are still hopes that sector is stabilising. Moreover, there was a rise in new orders at the strongest pace since March, while export orders, in turn, ticked up at the fastest pace since September 2014. Overall, a slight softening in the dollar from the record levels being reached late last year and at the beginning of 2016 has helped US firms sell more goods abroad, while stabilization in the price of crude oil has helped factories connected to the energy patch. In the meantime, manufacturing trends will have relatively small impact on Federal Reserve policy decisions, since the Fed is more concerned with the reassurance that the industrial sector is showing signs of stabilization.
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.
Upcoming fundamentals: US Independence Day and Australian rate
US markets are closed on the fourth of July, as the country has a public holiday. However, gold prices might be affected amidst the next Asian session, as the Reserve Bank of Australia will release its rate statement and with it the rate itself at 4:30 GMT. If the rate gets changed, it could affect gold prices, as the country down under has a huge impact on the industry, as one of the top producers of the yellow metal.
Gold reaches 1,350 level on Monday
Daily chart: The yellow metal marks its fourth consecutive session of gains, as the metal reached the 1,350 level on Monday. However, the main surge happened Friday, as the commodity started the day's session at 1,322.13 and ended day's trading at 1,340.20. On Monday morning gold continued its rally and touched the first weekly resistance at 1,354.84. At the moment, the metal has retreated to the level of 1,345, as the weekly R1 managed to push the bullion back.Daily chart
Hourly chart: The hourly chart shows that the yellow metal, just like the previous three trading sessions, steadily scored gains on Friday. As the metal passed all resistances put up by the simple moving averages, it is bending the upper Bollinger band and moved unopposed to the weekly R1 at 1,354.84. Gold touched the resistance around 2:00 GMT on Monday and bounced off it, and, at the moment, the commodity is about to test the resistance again.
Hourly chart
SWFX traders increase bearish stance on Monday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 60.66%. In addition, SAXO bank clients are also bullish on the yellow metal, as 53.90% of positions are long.