US retail sales rose modestly last month due to lower sales of motor vehicles, official figures revealed on Wednesday. According to the Commerce Department, retail sales advanced 0.1% in November, compared to the preceding month's downwardly revised gain of 0.6%, whereas analysts expected sales to grow 0.3%. Year-over-year, sales increased 3.8%. Excluding volatile items, core retail sales climbed 0.1%, following October's 0.6% rise and falling behind the 0.4% gain market forecast. Analysts suggest the US presidential elections had some degree of general impact on sales last month, as traditionally November marks the start of the important holiday shopping season. Separately, the Labor Department reported that its Producer Price Index grew 0.4% on a monthly basis in November, the biggest increase since June, after remaining unchanged last month. On a yearly basis, producer prices rose 1.3%, the largest gain since November 2014. In the meantime, the US Federal Reserve raised interest rates for the first time in a year. Also, Fed chairwoman Janet Yellen announced a 0.25% hike in the benchmark rate to 0.50-0.75%, and predicted three further rates increase in 2017.
The US unemployment rate fell to a nine-year low in November, adding to expectations that US interest rates will rise later this month. Figures from the Labor Department showed the US economy created 178,000 jobs in November, while the jobless rate fell to 4.6% from 4.9% in October. The first employment report since voters went to the polls last month shows an economy in strong shape as President-elect Donald Trump prepares to take office. The unemployment rate fell to levels not seen since August 2007, before a bubble in the U.S. housing market began to burst. The fall was driven partly by the creation of new jobs and partly by people retiring and otherwise leaving the labor force. In addition, average hourly earnings in the US fell more-than-expected last month touching a seasonally adjusted -0.1%, from 0.4% in the preceding month. The data release comes ahead of the Fed's meeting, when the central bank is expected to announce its first interest rate increase in a year.
Upcoming fundamental releases: US CPI; Philly Fed Manufacturing Index; Unemployment claims
Fundamental data releases are bound to shake up the XAU/USD market on Thursday, as a set of both high and medium impact announcements are likely to at least somewhat surprise investors. While a set of medium impact data will come out in the morning session until 9:00 GMT, we will eye markets closely at 13:30 GMT when the US CPI, core CPI, Philly Fed manufacturing index and unemployment claims come out.
Gold breaks levels amid surging Dollar
Daily Chart: A dip below the senior downtrend came as a surprise on Wednesday, as well as a confirmation of the month-long channel relevance. XAU/USD is currently attempting to dive underneath the bottom Bollinger Band at 1,138.73 and will face more risk at 1,135.96, the weekly S2. We would expect a retracement from the broken trend-line, meaning that the Bullion could reverse until the end of the day, but might as well manage to extend a dive if the correction comes sooner. Ultimately we would expect the pair to target the bottom boundary of the channel at 1,115.66.SWFX sentiment stays the same
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,284 by March
Traders who were asked regarding their longer-term views on gold between November 15 and December 15 expect, on average, to see the metal around 1,284 mid-March. Generally, 40% (-1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 35% of those surveyed reckon the currencies will trade in the range between 1,150 and 1,300 over the next three months.