US industrial production rose more than expected in June on large gains in automotive manufacturing and utility output, reported the Federal Reserve, a sign that the economy was regaining momentum at the end of the second quarter. Industrial production, a broad gauge of output across American factories, mines and power plants, rose 0.6% month-on-month during the sixth month of year, compared to the 0.4% downturn seen in May, when it fell to red figures. Economist forecasted a 0.2% increase in June. It has shown halting signs of improvement after a downturn over the past 18 months caused by weak global demand, a strong dollar and the fall in oil prices. However, manufacturing output rose 0.4% in June after an upwardly revised 0.3% fall in May, while production of consumer goods rose 1.1%. Output of automotive products jumped 5.9%, while machinery output was up 1.1%. Output of computers, electronics and appliances increased 1.5%. Moreover, with overall output up, the percentage of industrial capacity in use rose to 75.4% in June from an unrevised 74.9% in May. The Fed sees capacity use as a leading indicator in deciding how much further the economy can grow before sparking higher inflation.
On Thursday, the Bank of England surprised markets by holding interest rates, despite hints from Governor Mark Carney that policy easing could be possible made earlier. Economists had expected a rate cut of 25 points to 0.25%, which would have been the first rate change in seven years. Following assumptions appeared after the Brexit referendum on 23 June, when Britons widely vote to leave the European Union. According to the minutes of the meeting, the Bank's Monetary Policy Committee voted by 8-1 to hold rates, as well as hinting that they "expect monetary policy to be loosened in August". Moreover, the BoE announced in its policy statement that they would give another month to evaluate the Brexit's impact on the economy and probably would raise stimulus measures in August. Currently, the bank's benchmark rate equals 0.5%. Following decision is widely appreciated by economists, since many experts are saying the Bank made the right decision by leaving interest rates unchanged. In the meantime, the Pound advanced while shares, in turn, dropped after the Bank of England unexpected decision. The Cable added around 1.4%, or two cents, versus the dollar reaching $1.3326.
Upcoming fundamentals: NAHB Housing and TIC Net
On Monday there are only two notable data releases, which could affect the yellow metal, as NAHB Housing Market Index will be released at 14:00 GMT. In the evening, the Long-term TIC NET and Total TIC Net for May will be published at 20:00 GMT. The TIC is the most important part of the capital account which also provides good insight into the demand for USD or investments.
Gold almost unchanged on Friday
Daily chart: The yellow metal saw some volatility on Friday, however, it did not change much during Friday's trading session, as the metal started day's trading at 1,336.50 and ended it at 1,335.12. With the start of the new week the bullion is losing value, as it started Monday's trading at 1,333.04 and fell to 1,328.22 by 5:15 GMT. If the metal continues to fall, it is set to meet the first weekly support at 1,312.88, and below this support there are no other major support line until the monthly PP at 1,295.11. However, daily aggregate technical indicators forecast a surge for gold today.SWFX traders bearish on Monday
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,375 by the end of September
Traders who were asked regarding their longer-term views on gold between June 18 and July 18 expect, on average, to see the metal around 1,375 by the end of September. Generally, 45% of participants believe the price will be generally above 1,400 in ninety days. Alongside, 45% (-3%) of those surveyed reckon the price will trade in the range between 1,200 and 1,400 over the next three months