- SWFX traders are 53% bullish
- 61% of pending commands are to buy the metal
- The bullion opened at 1,247.30 on Wednesday
- Upcoming Events: US Core PCE Price Index, FOMC Member's Kaplan's Speech, FOMC Member's Brainard's Speech, ISM Manufacturing PMI
The US economy grew less than expected in December quarter even in spite of higher consumer spending observed in the reported period. Figures released on Tuesday showed the US economy grew at an annualised pace of 1.9% in the Q4, following a strong 3.5% reading registered in the preceding quarter and falling behind analysts' expectations for a 2.1% rise. In the report, the Commerce Department highlighted that the economic growth was mainly boosted by consumer spending that was revised to 3.0% from 2.5% reported previously. With household spending accounting for no less than 70% of the American economic activity, analysts around the world remained optimistic on the overall growth in the country in the months ahead. Furthermore, the report revealed that the surge in purchases by consumers in the final quarter of 2016 was mainly driven by higher sales of new cars and trucks.
Apart from that, Americans were seen to have spent more on health care. On balance, inventory investment was revised down to $46.2B from $48.7B, while spending on equipment rose a more modest 1.9% instead of 3.1% originally estimated. Moreover, there were changes in trade figures, with imports climbing 8.5% along with a sharp 4.0% decline in observed in exports
Upcoming events: Several US events
The main events in the US are the release of Core PCE Price index at 13:30 GMT and the ISM manufacturing PMI at 15:00 GMT, the first one will reveal the amount of the consumed goods in the US and the second one will show the expansion of the US production. In addition the speeches coming from FOMC members Kaplan at 18:00 GMT and Brainard at 23:00 GMT may provide hints onto the possible change of the monetary policy in the US, which may lead to the change of the commodity price.
Gold retreats below 1,250 level
Daily chart: During the early hours of Wednesday's trading session the yellow metal was in its third consecutive session of losses, as the bullion's price retreated below the 1,250 mark and it even had touched the 1,242.42 level. Gold is likely to fall until it reaches the support provided by the uptrend line, which has been pushing the commodity price higher since December 21. On Wednesday the line's support was located at 1,240.14 level. However, if that support is passed, the metal will face a strong support cluster, which begins at 1,236.39.Daily chart
Hourly chart: The hourly chart reveals that the commodity price is pushed towards the uptrend line by the falling 20-hour SMA. However, it can be seen that the 200-hour SMA at 1243.87 has an effect on the movement of the XAU/USD, since its descent slowed down for the last couple of hours near this support level. It is likely that, despite the influence of the 200-hour SMA, the price of the Gold will be able to fall until it reaches the supporting uptrend line.
Hourly chart
Traders still bullish on bullion
OANDA Gold traders have steeply increased their bullish outlook on the yellow metal, as open positions have are 62.08% long, compared to 58.40% on Tuesday. In addition, traders of SAXO bank have also increased their bullish view on the metal, as 58.28% of open positions are long.