- SWFX traders are neutral
- 65% of pending commands are to buy the metal
- The bullion opened at 1,233.94
- Upcoming Events: FOMC Member's Dudley's Speech; US Current Account
US industrial production was unchanged last month, while market analysts anticipated an increase, official figures revealed on Friday. The Federal Reserve reported factory production came in at 0.0% in February, falling behind analysts' expectations for a gain of 0.3%. Meanwhile, January's initially reported drop of 0.3% was revised to a 0.1% fall. However, manufacturing production, which accounts for 75% of overall industrial output, posted a 0.5% increase in February that matched the preceding month's rise. A global economic recovery, stronger business investment in equipment and appropriate inventory levels allowed manufacturers to gain momentum over the last several months.
The advance in manufacturing output was in line with analysts' forecasts. Data also showed utility output decreased 5.7%, following a 5.8% decline in January. The fall was mainly driven by unusually warm temperatures. Mining production rose 2.7% last month, boosted by oil and gas drilling. Business equipment output advanced 0.7% in February, compared to a 0.1% decline registered in the prior month, whereas production of construction supplies increased 1.3% after climbing 1.4% in January. Other data released on Friday showed mood of American shoppers jumped to 97.6 in March, according to the preliminary reading released by the University of Michigan.
Upcoming events: Minor US events
During Tuesday's trading session there are a few fundamental events set to take place, which might affect the financial markets. However, the possibility of the market being shaken during today's trading are quite low. The reason for that is that the only events are the FOMC Member's Dudley's Speech at 10:35 GMT and the US Current Account release at 12:30 GMT.
Gold drops below 1,230 level
Daily chart: During the early hours of Tuesday's trading session the yellow metal's price declined and fell below the 1,230 mark. This seems to be a consolidation of positions in the aftermath of a steady surge of more than three percent since the start of last Tuesday's trading session. It is most likely that the bullion will soon make an attempt of breaking the monthly PP, which is located at the 1,236.39 level. However, it is also possible that the commodity price will first retreat down to the 20-day SMA, which was located at 1,222.94 on Tuesday morning.Daily chart
Hourly chart: The hourly chart reveals the moment when the drop of the metal occurred. It fell at 01:00 GMT on Tuesday. The fall occurred exactly as the metal passed the 1,235 mark. That is consistent with the hypothesis made by various analysts this morning that some large institution cut short their positions and took profit at the 1,235 mark, as at that level they saw the metal reaching a ceiling level. However, since then the metal has been slowly recovering. Although, it is now set to face the combined resistance of the 20 and 55 day SMAs, which are located at the 1,230.87 level.
Hourly chart
Markets remain bullish
OANDA Gold traders have decreased their bullish outlook, as open positions are 65.93% long on Tuesday, compared to 69.42% previously. In addition, traders of SAXO bank have also decreased their bullish outlook, as 61.36% of open positions are long, compared to 64.29% on Monday.