- 51% of all SWFX open positions are short
- Gold reached a rising wedge pattern's lower trend line on Thursday
- Economic events to watch over the next 24 hours: US CPI (August);
According to the Labor Department, the number of Americans filing for unemployment aid rose to a seasonally adjusted 260,000 in the week ended September 10, slightly up from the preceding week's 259,000 claims, while market analysts anticipated an increase to 262,000 during the reported week. It was the 80th consecutive week initial jobless claims remained below the 300,000 level, the longest streak since 1973. The four-moving average of claims, considered a better measure of labor market trends, fell 500 to 260,750 during the same week. Separate data released by the Labor Department revealed that the PPI came in at 0.0% in August, up from July's decline of 0.4%. However, markets expected the Index to increase 0.3%. The so-called core PPI advanced 0.1% last month, also up from July's 0.3% fall and in line with economists' projections. Other Thursday's data showed that US retail sales declined 0.3% monthover-month in August, compared to July upwardly revised 0.1% rise, whereas economic desks penciled in a slight drop of 0.1% in the reported month. Excluding automobiles, gasoline, building materials and food services, retail sales slipped 0.1% last month, following the previous month downwardly revised fall of 0.4% and falling behind the 0.3% growth forecast.
US import prices dropped unexpectedly last month amid lower petroleum and food prices, official data revealed on Wednesday. According to the Department of Labor, import prices fell 0.2% on a monthly basis in August, compared to the preceding month's unrevised gain of 0.1%, whereas market analysts penciled in a decline of 0.1% in the reported month. Moreover, that was the first monthly fall since February. Lower oil prices as well as the strong US dollar put downward pressure on the price of imports last month. August's decline in import prices was led by a monthly fall in the cost of imported communications equipment, which dropped 1.0%. On the positive side, the price of imports from Japan jumped 0.3% in the reported month, posting the largest increase since August 2011. The cost of imported petroleum fell 2.8% in August, following the previous month's decrease of 3.6%. Excluding petroleum, import prices remained unchanged after rising 0.5% in July. Other data released by the US Energy Information Administration on the same day showed that crude oil inventories fell 0.6 million barrels in the week ended September 9, following the 14.5 million barrel drop seen in the previous seven days and surpassing the 2.8 million barrel gain forecast.
Upcoming fundamentals: US CPI
After many and various data releases occurring on Thursday, it will be a quiet trading week's last session. There is only one notable fundamental data release set to occur during Friday's trading session, and it will be the US CPI data. Traders should look at the US CPI and US Core CPI on a month-to-month basis. The two indicators are forecasted to have an increase respectively of 0.1% and 0.2% for the CPI and Core CPI.
Gold begins Friday above trend line
Daily chart: The yellow metal is no longer bouncing around the level of 1,320, as the metal retreated below the weekly S1 at 1,315.33. The fall occurred during Thursday's trading session, when the bullion ended the day's trading session at 1,313.10. In addition, the commodity touched the rising wedge pattern's support line, which on Friday is located at 1,312.94. On early Friday morning, gold was squeezed in tightly between the weekly S1 and the trend line. The price is most likely to stay at this level.Daily chart
Hourly chart: The hourly chart for gold shows a steady decline of the metal during the past 24 hours, as the SMAs kept pushing it lower. During the movement lower the commodity moved below the weekly S1. However, from 12:00 GMT to 15:00 GMT the bullion experienced high volatility, as the price fell from 1,320.61 to 1,309.22 and rebounded back up to 1,320.86.
Hourly chart
Traders expect a surge
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 73.48%. In the meantime, SAXO bank clients are also bullish on the yellow metal, as 67.45% of positions are long.