Gold fluctuates above 1,250

Source: Dukascopy Bank SA
  • 58% of all SWFX open positions are long
  • Gold opened Monday's session at 1,251.39
  • The 1,250 psychological level continues to provide support
  • Economic events to watch over the next 24 hours: US Empire States Manufacturing Index; US Capacity Utilization Rate; US Industrial Production; FOMC Member Fischer Speaks;
The yellow metal was in a slight rebound on Monday morning. Previously, the metal retreated after encountering resistance. However, as expected the commodity found support in the strong 1,250 level, which has kept the bullion from falling for more than a week.

US retail sales rose more than expected last month, official data revealed on Friday. According to the US Department of Commerce, retail sales grew 0.6% month-over-month in September, in line with analysts; expectations, whereas the preceding month's figure was revised up to -0.2% from the originally reported reading of -0.3%. On an annual basis, retail sales rose 2.7% in the reported month. Excluding automobiles, building materials, food services and gasoline, retail sales advanced 0.5% in September, following August's upwardly revised drop of 0.2% and surpassing the 0.4% rise forecast. The September growth was mainly driven by sales of automobiles, which rose 1.1% in September after falling 0.3% in August. Other data released by the Department of Labor on the same day showed the Producer Price Index climbed 0.3% in September, compared to last month's 0.0%, while analysts anticipated an increase of 0.2% during the reported period. Year-over-year, the PPI jumped 0.7%, posting the biggest increase since December 2014. Currently, The Atlanta Fed is expecting the US economy to expand at an annualised pace of 2.1% in the Q4 after growing 1.4% in the Q3.

The number of Americans filing for unemployment benefits remained at its 43-year low last week, official figures showed on Thursday. According to the US Department of Labor, initial jobless claims held at a seasonally adjusted 246,000 in the week ended October 8, while market analysts anticipated a slight increase to 252,000 during the reported period. Meanwhile, the preceding week's figure was revised down to 246,000 from the originally reported reading of 249,000. It was the 84th consecutive week of initial claims remaining below the 300,000 level, the longest streak since 1973. The four-moving average of claims, considered a better measure of labour market trends, declined 3,500 to 249,250 last week, the lowest level since November 1973. The data also showed the number of continuing claims decreased 16,000 to 2.05 million in the week ending October 1, the lowest level since June 2000, while its four-week moving average fell 25,750 to 2.07 million. In a separate report, the Department of Labor said import prices rose 0.1% month-over-month in September, following August's 0.2% drop and meeting analysts' expectations. On an annual basis, import prices declined 1.1% in the same month, compared to the previous month's 2.2% fall.

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Upcoming fundamentals: Various data throughout the day

US Dollar's strength during the day will be affected by various data releases. First of all at 12:30 GMT the Empire State Manufacturing index will be released. Afterwards, at 13:15 GMT the US Capacity Utilization Rate will be out together with the Industrial Production. Last but not least, the FOMC Member Fischer is set to give a speech at 16:15 GMT.



Gold remains above 1,250 level

Daily chart: The yellow metal had once more rebounded against the 1,250 support level on Monday morning, as the metal had fallen to the support level once more, erasing all of the previous week's minor gains. However, with the start of a new week, the metal seems to be set to trade in a narrow range during this week, as the newly formed levels of significance are located close by one to another. Moreover, weekly aggregate technical indicators forecast no change in the price of the commodity by the end of the week.

Daily chart
© Dukascopy Bank SA

Hourly chart: The hourly chart for the metal reveals that it hit and rebounded against the 1,250 level two times during the previous trading session. Moreover, the weekly PP did not provide enough resistance, and let the bullion pass freely. However, the commodity struggles with the combined resistance of the 55 and 100-hour SMAs.

Hourly chart
© Dukascopy Bank SA


Traders remain bullish

Traders remained bullish on gold on Monday, as 58% of open positions were long. In the meantime, pending commands were unchanged, as 61% of set up orders were to buy.

Meanwhile, OANDA Bank clients remain majorly bullish with respect to the bullion, as on Monday morning 77.34% of all positions were long. In the meantime, SAXO bank clients show a similar trend with 66.32% of all positions being held by bulls.

Spreads (avg,pip) / Trading volume / Volatility


Market participants foresee the price of gold below 1,350 in January

Traders who were asked regarding their longer-term views on gold between September 17 and October 17 expect, on average, to see the metal below 1,350 by January. Generally, 41% (-2%) of participants believe the price will be above 1,350 in ninety days. Alongside, 43% (+3%) of those surveyed reckon the price will trade in the range between 1,200 and 1,350 over the next three months

© Dukascopy Bank SA

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