- 51% of all SWFX open positions are short on Monday
- Prices touched 1,330 level on Monday
- A fall was caused by US Non-Farm Payrolls data on Friday
- Economic events to watch over the next 24 hours: US Unit Labor Costs (Q2); US Wholesale Inventories (June)
The US non-farm sector created more jobs than expected last month, whereas the unemployment rate remained unchanged, fresh data from the Department of Labor showed on Friday. According to the Bureau of Labor Statistics, the US non-farm payrolls (NFP) increased by 255,000 in July, while market analysts expected the sector to add just 181,000 jobs in the reported period. Meanwhile, the preceding month's figure was revised up to 292,000 from the originally reported reading of 287,000. Furthermore, the headline jobless rate came in at 4.9% in July, in line with last month's figure, whereas economic desks pencilled in a slight deceleration to 4.8%. The report also revealed that average hourly earnings rose 0.3% month-over-month on a seasonally adjusted basis in July, following the 0.1% increase registered in June, while economists anticipated the indicator to come in at 0.2% in the reported month. On a year-over-year basis, average hourly earnings remained steady at 2.6%, meeting analysts' projections. The NFP report provides important insights into the health of the US economy and offers some clues to the path of future rate hikes. Back in 2012, the Federal Reserve set an unemployment target of 6.5%.
As markets expected, the Bank of England (BoE) introduced a range of additional monetary policy measures and upgraded its growth and inflation forecasts at its August meeting on Thursday amid Britain's decision to leave the European Union. All nine members of the Monetary Policy Committee voted anonymously to cut the main lending rate to a record low 0.25% from 0.50%. Furthermore, the central bank expanded its quantitative easing (QE) programme to 435 billion pound from 375 billion pound, while markets expected the BoE to leave its QE scheme unchanged. Three of nine policymakers voted unanimously against the decision. The latest batch of surveys showed that the UK economy contracted at its steepest pace and may even slip into recession following the Brexit vote, however, the BoE kept its 2016 economic growth forecast unchanged at 2.0%, as the UK economy had a stronger than expected performance in the first half of the year. Nevertheless, the central bank lowered its 2017 growth forecast to 0.8% from an earlier estimate of 2.3%, while the 2018 estimates were slashed to 1.8%. Moreover, the BoE increased its 2018-2019 inflation forecast to 2.4% amid weakness in the Sterling.
Upcoming fundamentals: US Unit Labor Costs and Wholesale Inventories
Data affecting the yellow metal pair on Tuesday will be coming from across the Atlantic, as two different, but still interconnected, statistics releases will happen in the US. First will be the US Unit Labor Costs for the second quarter of this year, and they will be released at 12:30 GMT. The unit labor costs are forecasted by experts to have grown by 1.7% in the last quarter. Second will be the US Wholesale Inventories for June at 14:00 GMT. The wholesale stockpiles are expected to have grown by 0.1% in June.
Gold flat at 1,333 on Tuesday
Daily chart: The yellow metal did not move in a certain direction on Monday, as the metal slightly moved lower to 1,333.93 at the end of the day's trading session. On Tuesday morning, the commodity opened day's trading higher than the previous close, as it started trading at 1,335.70. However, by 5:30 GMT gold had moved lower to 1,333.80 level, as the metal tried to break through resistance put up by the 20-day SMA at 1,337.37 and failed at it. If the metal continues to fall, there are no support levels, which could stop it, until the level of 1,324.16.Daily chart
Hourly chart: The hourly chart shows that nevertheless the fact that the yellow metal has remained mostly unchanged, compared to Monday's morning level, gold fluctuated during the previous session. The bullion touched the 1,329.90 level by 9:00 GMT on Monday during its fall. However, afterwards the commodity surged to 1,336.99 by 14:00 GMT, and it stayed at this level up to 4:00 GMT on Tuesday. Although in the last three hours leading up to 6:00 GMT gold had fallen to 1,332.42 mark.
Hourly chart
SWFX sentiment unchanged on Tuesday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 61.89%. In the meantime, SAXO bank clients are slightly less bullish on the yellow metal, as 64.45% of positions are long.