- 44% of all SWFX open positions are bearish
- Prices fluctuating around 1,330 level on Friday morning
- Gold fell on the clarity brought on by the new UK's prime minister
- Economic events to watch over the next 24 hours: BoE Minutes (Jul 14); US Initial Jobless Claims (July 9); US PPI (June); Fed's Bullar Speaks; FOMC's George Speaks; Fed's Lockhart Speaks; Baker Hughes US Rig Count Change Crude Oil (July 15); Fed's Kaplan Speaks
On Thursday, the Bank of England surprised markets by holding interest rates, despite hints from Governor Mark Carney that policy easing could be possible made earlier. Economists had expected a rate cut of 25 points to 0.25%, which would have been the first rate change in seven years. Following assumptions appeared after the Brexit referendum on 23 June, when Britons widely vote to leave the European Union. According to the minutes of the meeting, the Bank's Monetary Policy Committee voted by 8-1 to hold rates, as well as hinting that they "expect monetary policy to be loosened in August". Moreover, the BoE announced in its policy statement that they would give another month to evaluate the Brexit's impact on the economy and probably would raise stimulus measures in August. Currently, the bank's benchmark rate equals 0.5%. Following decision is widely appreciated by economists, since many experts are saying the Bank made the right decision by leaving interest rates unchanged. In the meantime, the Pound advanced while shares, in turn, dropped after the Bank of England unexpected decision. The Cable added around 1.4%, or two cents, versus the dollar reaching $1.3326.
The number of Americans filing unemployment benefits remains unchanged compared to the previous week, demonstrating the lowest level since April, giving a hint that labour market started to recover amid a shaky global economy. According to the Labour Department, initial claims for state unemployment benefits were unchanged at a seasonally adjusted 254,000 for the week ended July 9. Also, following tendency left claims close to a 43-year low of 248,000 touched in mid-April. Economists, in turn, had expected jobless claims to reach 265,000 from the 268,000 originally reported for the June. Taking into consideration week-to-week volatility, the four-week moving average slipped to 259,000 compared to the last week's average of 264,750. In the meantime, according to the Energy Information Agency, the natural gas storage advanced more-than-expected in June. Natural gas stocks went up by 64 billion cubic feet for the week ending July 8. Analysts, in turn, were expecting a storage addition in a range of 55 billion to 65 billion cubic feet. Meanwhile, the five-year average for the week is an injection of around 77 billion cubic feet.
Upcoming fundamentals: US CPI, retail sales, capacity utilization, industrial production
There are many data releases from US today. First will be the US CPI at 12:30 GMT, which will be available in monthly and yearly timeframes, with or without food and energy. At the same time, US Retail sales for June will also be released. Moreover, Empire State Manufacturing index will be out at 12:30 GMT. Afterwards, at 13:15 GMT US Capacity Utilization and Industrial Production will be released for June. Another important data release will be UoM Confidence Preliminary index for June at 14:00 GMT. Afterwards, gold might be affected by oil prices, as the Baker Hughes US Rig Count for crude oil will be released at 5:00 GMT. The day will end at 5:15 GMT, as Fed's Kashkari will have a discussion with St. Louis Fed President James Bullard, in St. Louis.
Gold drops on Thursday
Daily chart: The yellow metal fell during this week, as it declined from Monday's height of 1,367.64 and touched the support at 1,319.10 on Thursday. However, the bullion ended Thursday's trading at 1,334.77. At the moment, the metal continues to decline, as by 5:30 GMT it was trading at 1,333.20. On its way down, the commodity will again struggle with support provided first by the 20-day SMA and afterwards the weekly S2 at 1,319.10. Meanwhile, daily aggregate technical indicators forecast a surge for gold today.Daily chart
Hourly chart: The hourly chart for gold shows, that the yellow metal stopped its Wednesday's surge at 1,343.12 1:00 GMT on Thursday, when it started moving south. The metal was losing value until it reached a support at 1,319.10 by 12:00 GMT. Afterwards, the metal surged until it met with the 55-hour SMA at 1,336.04 by 22:00 GMT and bounced off it. Since then the bullion has been fluctuating around the 1,330 level.
Hourly chart
SWFX traders bearish on Friday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 60.90%. In the meantime, SAXO bank clients are more bullish on the yellow metal, as 61.77% of positions are long