- 66% of all SWFX open positions are bearish
- Prices fluctuating around 1,360 level on Friday morning
- Gold surged on release of the UK Referendum results and following uncertainty
- Economic events to watch over the next 24 hours: Fed's George Speaks; US Labor Market Conditions Index (June); Fed's Lockhart Speaks
On Friday, the US jobs market was surprised by positive economic data which expanded during the previous month, allaying fears that the economy was exposed for a sustained slowdown after a moderate start of this year. According to the data, the unemployment rate went up to 4.9% from 4.7% May. This could be explained mostly due to the 414,000 people who entered the US labour force, which spurred the labour force participation rate up to 62.7% in June compared to the 62.6% in May. Moreover, according to the data released by the Bureau of Labour Statistics, employers injected 287,000 jobs in June, up sharply from a soft addition of only 11,000 jobs the month before. Although, many analysts forecasted job growth to rebound, they were also highly waiting to see if the gloomy figures from May were repeated, which would be a hint that the economy might be sinking into deeper trouble. In the meantime, May jobs report is only one report, as well as June's jobs report is just one report. Therefore, it is not enough in order to get a better sense of how these reports will affect the Fed's outlook for monetary policy.
The number of Americans filing unemployment benefits unexpectedly plunged last week, to the lowest level since April, giving a hint that labour market started to recover amid a shaky global economy. According to the Labor Department, initial claims for state unemployment benefits lost 16,000 to a seasonally adjusted 254,000 for the week ended July 2. Moreover, following drop left claims close to a 43-year low of 248,000 touched in midApril. Economists, in turn, had expected jobless claims to reach 270,000 from the 268,000 originally reported for the June. Meanwhile, today, on Friday, the highly anticipated June employment report will show whether job creation remains sluggish or is starting to recover. In the meantime, according to the Energy Information Agency, the US commercial crude stockpiles declined by 2.2 million barrels to a total of 524.4 million in the week through July 1. Oil futures diminished by nearly 5%, on this news, settling their lowest level in two months. Oil remains vulnerable to further price declines mainly due to the UK's plan to leave the European Union, as well as due to the stronger dollar.
Upcoming fundamentals: Fed speakers and US labour conditions
Later in the day, at 14:00 GMT, Kansas City Fed's George will give a speech at the Mid-America Labor Management Conference in Missouri and US Labor Market Conditions Index for June will be published at that time. Afterwards at 15:15 GMT Atlanta Fed's Lockhart is set to give a speech at Eighth Annual Rocky Mountain Economic Summit in Victor, Idaho.
Gold resumes to surge on Friday
Daily chart: The yellow metal saw much volatility during Friday's trading session, as the metal fluctuated between the levels of 1,335.35 and 1,370.38. However, it managed to surge from 1,359.10 at the start of day's trading to 1,365.66 at the end of weeks trading. On Monday morning the yellow metal started this week's higher at 1,367.75, although it had fallen to 1,363.71 by 5:00 GMT. In the meantime, daily aggregate technical indicators predict a surge for gold. Although, the weekly forecast predicts no change for the metal this week.Daily chart
Hourly chart: The hourly chart shows that the bullion was fluctuating steadily around the level of 1,356 on Friday until the US employment data was released, which made the metal fall to 1,335 level at one moment. However, the XAU/USD pair rebounded afterwards and for a slight moment touched the 1,370 mark, after which it fell back to 1,352. Afterwards, the yellow metal started surging and gradually climbed to 1,372 level by 22:00 GMT of July 10. Since then gold has been slowly falling down and, it was trading at 1,362 by 6:15 GMT.
Hourly chart
SWFX traders bearish on Monday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 56.00%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 55.29% of positions are long.