- 54% of all SWFX open positions are short
- Friday's Janet Yellen's speech did not move the metal off course
- Economic events to watch over the next 24 hours: US S&P/CS 20-City HPI (June); US Consumer Confidence (August);
The Federal Reserve's (Fed) favorite measure of inflation held steady in the seventh month of the year, official data revealed on Monday. According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index (PCE), excluding the volatile food and energy components, rose 1.6% year-over-year in July, unchanged from last month, while market analysts anticipated a slight decrease to 1.5% in the reported month. On a monthly basis, the core PCE grew 0.1% in July, in line with analysts' expectations and the previous month's reading. The overall PCE advanced 0.8% on a yearly basis in the same month, following June's 0.9% and meeting market forecasts. The data also showed that personal spending climbed 0.3% on a monthly basis in July, down from June's upwardly revised 0.5% gain, whereas personal income jumped 0.4% on the same basis in July, compared to last month's upwardly revised 0.3% hike. Both readings came in line with analysts' projections. Federal Reserve Chairwoman Janet Yellen left the door open for a hike this year during her speech in Wyoming, arguing that the US economy created a lot of jobs lately and it is on a moderate growth path, despite recent disappointing economic data.
New orders for US manufactured capital goods climbed in July for a second month, fresh figures revealed on Thursday. According to the Department of Commerce, demand for all durable goods rose 4.4% in the reported month, the highest reading since October 2015. Market analysts expected US orders for long-lasting goods to increase 3.4% in July, following last month's 3.9% upwardly revised drop. Excluding transport, orders jumped 1.5% in the same month, compared to June's 0.4% upwardly revised decline and surpassing the 0.4% market forecast. The gain in overall durable goods orders was mainly driven by a 10.5% rise in demand transportation equipment. Orders for civilian aircraft, which are extremely volatile month to month, advanced 89.9% in July, while orders for automobiles remained flat. Meanwhile, the rise in core durable goods orders follows an increase in oil and gas drilling activity. Other data released on Thursday showed the number of Americans filing for unemployment benefits dropped to 261,000 in the week ending August 20, following last week's 262,000 claims. Economic desks penciled in a slight acceleration to 265,000 in the reported period. This marks 77 consecutive weeks of initial claims below 300,000, the longest streak since 1973. The four-week moving average fell to 264,000 from 265,250 seen in the previous seven days.
Upcoming fundamentals: US S&P/CS 20-City HPI and US Consumer Confidence
In the afternoon of the day, data from the US will start pouring in, as at 13:00 GMT the S&P/CS 20-City HPI index for June will be released. However, more impact on the strength of the US Dollar will be done by the US Consumer Confidence index for August, which will be released at 14:00 GMT.
Gold trading above 1,320 mark on Tuesday
Daily chart: The yellow metal opened Tuesday's trading session higher than the previous Monday's close, as the metal traded above the 1,320 level on Tuesday morning. It is most likely that the bullion will surge at least to the level of 1,327.75, where the weekly PP is located at. However, gold will probably bounce off the resistance and move lower, as the weekly PP is also supported by the 20 and 55-day SMAs respectively at 1,333.08 and 1,329.49. Due to that, on a daily timeframe the yellow metal's price will remain unchanged.Daily chart
Hourly chart: On the hourly chart for Gold it can be seen that the yellow metal had been steadily surging from the early morning on Monday until 18:00 GMT, when the metal approached a resistance cluster. The cluster was only forming at that time, as the upper Bollinger band was approaching the 100-hour SMA. Due to that, the metal stopped its surge and retreated to the 55-hour SMA at 1,322.28 by 20:00 GMT. The metal became squeezed in between the two level, as the lower Bollinger band also joined the 55-hour SMA. However, the chart clearly shows, that the 100-hour SMA and the upper Bollinger band will push the metal lower, as the 55-hour SMA is almost horizontal, while the upside resistance cluster is moving in.
Hourly chart
SWFX traders remain bearish on Tuesday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 64.55%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 54.35% of positions are long.