Wholesale sales rose less than anticipated for the fourth consecutive time on Monday, with data failing to meet the 0.5% forecast. The reading stood at 0.1%, meaning a C$54.8 billion, as reported by Statistics Canada. Consequently, the weak reading means that barely any growth occurred in May, as the figures declined for two months in a row prior to that. Among the sales sectors rebounds were detected in raw materials, such as ores, minerals, wood logs, precious and industrial metals. These materials contributed to the wholesale sales the most since August 2011. Elsewhere, food and beverages showed signs of growth, providing a decent boost to the wholesales sales reading. However, these gains were offset by drops in the sales of machinery and equipment, construction, mining and other activities. Furthermore, supplies and building materials also contributed to the weaker-than-expected growth, with their sales down 2%, making it a decline for the fourth month in a row. Nevertheless, the wholesale sales is the data required for the calculation of the upcoming Canadian GDP, which is due next week, while the retail sales data, also required, is coming up next this week. Despite a poor reading of the wholesale trade, the GDP is unlikely to post a slowdown.
According to the minutes released by RBA from its June meeting, the cash rate was maintained at record low 1.75 %, while measure of both short-term and long-term inflation remain below average. Following minutes, gave no indication that it would ease again in the nearest future. Meanwhile, low inflation and concerns about deflation forced RBA to announce an interest rate cut in May, in line with the release of the federal budget. Consumer prices, in turn, were below trend and are expected not to change, giving an additional support to the bank to keep the rate unchanged at 1.75% after May's 25-basis point cut. In the meantime, during the first quarter, the Australian economy had expanded 3.1%, showing the fastest growth in three and a half years. Low interest rates as well as weak Australian dollar were reinforcing the economy, thus pushing the unemployment rate down to 5.75% from 6.25% during the current year to the March quarter. Moreover, an overall advance in exports due to the higher resource production, also provided an additional support to the economy. Recent economic data proves that Australia is experiencing overall growth, despite a huge decline in business investment.
Upcoming fundamentals: FED's Janet Yellen testifies to the Senate
Gold remains unchanged on Monday
Daily chart: Even as the bullion experienced high volatility on Monday by fluctuating between the levels of 1,277 to 1,292, the yellow metal ended the day's trading session only around 60 pips higher than it started it. However, on Tuesday morning gold prices are falling, as the price moved from 1,289.44 at the start of trading session to 1,285.15 by 5:15 GMT. The price is located between the monthly R1 at 1,278.62 and weekly PP at 1,295.15. In the meantime, aggregate technical indicators forecast a surge for the metal today.SWFX traders decrease bearish sentiment on Monday
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,275 by the end of August
Traders who were asked regarding their longer-term views on gold between May 21 and June 21 expect, on average, to see the metal around 1,275 by the end of August. Generally, 62% (+1%) of participants believe the price will be generally above 1,250 in ninety days. Alongside, 32% of those surveyed reckon the price will trade in the range between 1,100 and 1,250 over the next three months