- 58% of all SWFX open positions are bearish
- Prices retreated from the 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 Durable Goods Orders (May); Fed's Dudley Speaks
According to the Australian Bureau of Statistics, the retail sales advanced at a faster rate in May. The release showed a 0.2% rise in seasonally adjusted sales, a slight improvement from the 0.1% growth rate in April. The following minor small was supported by people buying more groceries, going out for food at cafes and restaurants, and eating more takeaway. The newspapers and books sales, in turn, accelerated 0.5%, while pharmaceuticals and cosmetics added 0.6%. Moreover, department store sales stayed flat, while household goods showed a plunge of 1.1%. Clothing, footwear, and personal accessories also diminished 1.2% as the colder winter months remained unseasonably warm for most of May. Compared to a healthy print of $1.579 billion deficit in April the current Australia's balance on goods and services equals to $2.2 billion. Meanwhile, a median estimate of economists forecast was a deficit of $1.72 billion. Moreover, Australia's trade deficit has been on a gradual downtrend since the end of last year, mainly due to the weak local currency which pushed export volumes for the resourcedependent economy.
A monthly survey of purchasing managers suggests the outlook for Canada's manufacturing sector has become slightly less positive than it was in May. The RBC Canadian Manufacturing Purchasing Managers' index, a measure of manufacturing business conditions, dipped to a seasonally adjusted 51.8 last month from 52.1 in May. It was the fourth month in a row for the index to register more than 50.0, signaling that purchasing managers at Canadian manufacturing companies see signs of expansion in the coming months. There was no consensus forecast and the market reaction was limited. The need to re-build inventories should help protect manufacturing from a sustained downturn over the next few months. Accordingly, one of the major drags on the headline PMI was slower output growth. The output index fell to 51.5 from May's 11-month high of 52.8. Economic indicators show the Canadian economy continues to struggle with the impact of cheaper oil, a major export for the country. Data released last week showed only modest growth in the economy in April after two months of declines, paving the way for a sickly second quarter on the back of the devastation caused by major wildfires in Alberta.
Upcoming fundamentals: US Durable Goods
As the fourth of July celebrations of Independence Day in the US ended, new data will be released on Tuesday, which would affect the US Dollars strength and with it gold prices. US Durable Goods Orders changes for May will be published at 14:00 GMT. The data will consist of general Durable Goods Orders, Durable Goods Orders Ex Transport and Factory Orders. Last but not least today, the Fed's Dudley is set to give a speech at 18:30 GMT.
Gold stops the surge on Tuesday
Daily chart: The bullion stopped its four consecutive trading session surge on Tuesday, as the metal dropped from the previous day closing height of 1,350.80 on Monday. At the moment, gold is trading at 1,342 by 5:45 GMT. The main reason for such drop is that amidst yesterday's trading sessions volatility the yellow metal touched the resistance put up by the weekly R1 at 1,354.84. If the metal continues its downward movement, it is likely to move lower to the weekly pivot point at 1,330.15. However, daily aggregate technical indicators forecast a surge for the bullion today.Daily chart
Hourly chart: The hourly chart shows that the bullion dropped to the low level of 1,342.68 in a timeframe of one hour from 1:00 GMT to 2:00 GTM on the night from the fourth of July to July 5. Just before that the yellow metal surged to 1,351.72. Since then the bullion has been slightly volatile, as it kept fluctuating around the low level of 1,342.
Hourly chart
SWFX traders slightly increase bearish stance on Tuesday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 57.44%. In addition, SAXO bank clients are also bullish on the yellow metal, as 51.95% of positions are long.