- 57% of all SWFX open positions are short
- Gold surged gradually during Tuesday's trading session
- Economic events to watch over the next 24 hours: Fed's Rosengren's speech; US Wholesale Inventories (July);
Yesterday, on Thursday September 8, the European Central Bank decided to left interest rates in the single currency area unchanged, but being open for more cuts in the upcoming months and renewed calls to politicians to apply more stimulus for the economic recovery. A s a result, the ECB held the single currency area's main interest rate at zero. Also, the European Central Bank left its 1.7 trillion euro stimulus programme unchanged, brushing off concerns over economic shock waves from Britain's decision to leave the European Union. However, the ECB president Mario Draghi noted that uncertainty over the Brexit was among the factors dampening the Euro zone's growth and he unveiled a slightly weaker economic outlook for the bloc. Although, the ECB did not even discuss extending its 80 billion (per month) asset purchase programme, as president Mario Draghi noted "not so substantial to warrant a decision to act". The ECB President Mario Draghi also stayed that he is concerned over persistently low Euro zone inflation, which has fallen short of the ECB's near-2% target for more than three years. According to the fresh ECB staff forecasts, inflation rising very gradually, to 1.2% next year and 1.6% in 2018.
The number of Americans filing for unemployment benefits dropped unexpectedly last week, official data revealed on Thursday. According to the Labor Department, initial jobless claims fell 4,000 to a seasonally adjusted 259,000 in the week ended September 3, touching the lowest level since mid-July and following the preceding week's reading of 263,000. Market analysts anticipated a slight increase to 264,000 filings in the reported period. Last week's numbers market the 79th consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. There were no special factors influencing last week's claims data; however, jobless claims for Virginia, New Mexico, Alabama, Minnesota, Hawaii and Puerto Rico were estimated amid the Labor Day celebrated on Monday. Furthermore, the four-week moving average of initial jobless claims, considered a better measure of labor market trends, declined 1,750 to 261,250 during the same week. Meanwhile, the number of continuing jobless claims dropped 7,000 to 2.14 million in the week ending August 27, whereas the four-week moving average of continuing claims decreased 4,000 to 2.15 million. The claims data together with the latest JOLTS report suggest that the trend in employment growth remains strong.
Upcoming fundamentals: Fed speech and US Wholesale Inventories
Later in the day there will be two notable events in the US. The Fed's Rosengren will give a speech at 11:45 GMT, and the speech might give hints at the future decisions of the Fed. At 14:00 GMT the US Wholesale Inventories monthly change for July will be released.
Gold falls below 1,340 level
Daily chart: Gold traded just above the support cluster above 1,335 level on Friday morning due to a failure to break through a resistance cluster on Thursday. The yellow metal did not manage to break the resistance cluster comprised of the weekly R2 at 1,346.69 and monthly R1 at 1,348.50. On Friday morning the metal found support in the weekly R1 and 55-day SMA respectively at 1,335.65 and 1.336.20, which indicates that there might be another try to break the previously mentioned resistance cluster.Daily chart
Hourly chart: The hourly chart for the yellow metal shows that was surging up to the first monthly resistance at 1,348, which it passed around 9:00 GMT, but the surge was not sustained, as the metal fell afterwards. It was hit most at 15:00 GMT, when DOE-Crude Oil Inventories differed a lot from the forecast and sent all commodity prices lower, as huge fluctuations in oil price manage to move the whole market. Around 17:00 GMT the commodity found support in the 100-hour SMA at 1,336.67 and began moving higher with it, and that is what gold continued to do up to 6:00 GMT.
Hourly chart
Large proportion of orders are to buy the yellow metal
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 64.05%. In the meantime, SAXO bank clients have also become bullish on the yellow metal, as 54.39% of positions are short.