- 50% of all SWFX open positions are bullish, as the sentiment is neutral
- Prices fluctuating around 1,315 level on Thursday morning
- Gold was fluctuating with low volatility for 48 hours before the fall
- Economic events to watch over the next 24 hours: US Initial Jobless Claims (Jul 16); Philly Fed Manufacturing (July); US HPI (May); Existing Home Sales (June); US Leading Indicators (June); ECB Rate (July 21)
US housing starts and building permits rose in June, a sign that the country's housing market remained on solid footing at the end of the second quarter. Housing starts rebounded 4.8% on a monthly and seasonally adjusted basis to 1.189 million in June, sharply up compared with the market's expectation of a rise to 1.1150 million. Moreover, the US Census Bureau reported that contractors took out an additional 1.5% permits for construction of new dwellings in June, totaling 1.1153 million permits in the final month of Q2 2016. Analysts had expected an advance in the indicator to 1.165 million permits in the reported month. Housing starts are seen as an important pillar of the US economy. They not only reflect demand for housing, but also are an important catalyst for the construction sector. Moreover, residential construction added around 0.6 percentage points to first quarter gross domestic product. That was the biggest contribution in over six years. Meanwhile, building permits, a gauge of residential building intentions rose 4.8% to a seasonally adjusted annual pace of 1.189 million units. Permits had declined in two of the past three months. In addition, earlier this week, the latest data revealed that builder sentiment in the US ticked down in July, but pointed to ongoing housing growth.
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.
Upcoming fundamentals: US data and ECB rate
At 12:30 GMT the US Initial Jobless Claims for the week of July 16 will be released, and the Philly Fed Manufacturing index will be published at the same time. At 13:00 GMT the US home price increase for May will be released. Last but not least, at 14:00 GMT the US will send out even more data, as Existing Home Sales and Leading Indicators for June will be published. However, gold prices might also be affected by the ECB rate decision and the following press conference at 11:45 GMT.
Gold falls to 1,315 on Wednesday
Daily chart: The yellow metal stopped the previous low volatility movements and dropped on Wednesday from 1,331.10 at the start of day's trading session to 1,315.11 at the end of Wednesday's trading. In addition, the metal touched the weekly S1 at 1,312.88, but it slightly rebounded afterwards. On Thursday morning the bullion continued to struggle with the support level. However, daily aggregate technical indicators forecast no change for the commodity price today.Daily chart
Hourly chart: The hourly chart for gold shows that the yellow metal started falling from 1,330 level around 4:00 GMT on Wednesday. There was no single green hourly candlestick until the metal reached the weekly S1 at 1,312.88, and it rebounded against the support for two hours. Afterwards, gold moved back to the support and struggled against it for eight hours. However, the commodity did not fall below the support, and the metal surged in the past five hours up to 5:30 GMT.
Hourly chart
SWFX sentiment becomes neutral on Thursday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 65.34%. In the meantime, SAXO bank clients are even more bullish on the yellow metal, as 64.33% of positions are long.