Gold falls on Monday

Source: Dukascopy Bank SA
  • 65% of all SWFX open positions are bearish
  • Prices fluctuating around 1,355 level on Tuesday morning
  • Gold surged on release of the UK Referendum results and following uncertainty
  • Economic events to watch over the next 24 hours: BoE Carney Speaks; US JOLTS Job Openings (May); Wholesale Inventories (May); Fed's Kashkari Speaks
The Bullion once again has paused its surge, as, amidst uncertainty, the new PM of UK surfaced. Previously EU lawmakers met in the EU Economic Summit called together to deal with the UK issue and assumed a strict position on the matter However, it did not stop the yellow metal's surge. Because of that, even gold initially dropped slightly for two session since the Brexit, the bullion steadily surged for the past two weeks. That is due to the fact that uncertainty still prevailed in the past weeks, as the political intrigues in the UK for the prime ministers seat were unfolding. In addition, recently the Bank of England President's comments and the BoE's Financial Stability Report have affected the situation.

The U.S. labour market continued to slow in June but at a more moderate pace as the economy moved closer to full employment, according to an index prepared by the Federal Reserve. The US labour market conditions index registered a 1.9 decline for June from after a revised drop of 3.6 the previous month. This was the sixth successive decline and also a slightly larger than expected decline for the month, maintaining the generally disappointing trend seen for 2016 as a whole. The data could suggest an imminent turning point, but further evidence will be needed to convince markets of a sustained improvement despite the bumper payrolls release last Friday. The LMCI is a broad composite index of 19 labour-market indicators and it watched closely by the Federal Reserve with Chair Janet Yellen instrumental in setting up the index. The Fed introduced the index in 2014 as a way to measure the labour market's momentum. Moreover, Fed officials have touted the LMCI as a more comprehensive view of the labour market than the one provided by individual data releases from the Department of Labour and other agencies.

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.

Watch More: Dukascopy TV


Upcoming fundamentals: Carney speaks and US Job Openings

First of all on Tuesday, gold traders have to keep a lookout for the Bank of England president's speech at 9:00 GMT, which will give clarity regarding the future of the UK's monetary policy. Later in the day, the US JOLTS Job Openings for May are set to be released at 14:00 GMT. In addition to that, at the same time US Wholesale Inventories data will be published. Last but not least, late evening at 21:30 Minneapolis Fed's Kashkari will speak in Marquette, Michigan.



Gold falls to 1,354 on Monday

Daily chart: The yellow metal fell on Monday, as it started day's trading session at 1,367.53 and ended Monday's trading at 1,354.86. Although, it was the fourth consecutive session, when the bullion had reached above the 1,370 level, it seems to have finally rebounded, as the metal is now trading below the weekly PP at 1,358.76. If gold moves lower, it is set to meet the weekly S1 at 1,342.44, against which it might rebound and continue its streak of gains

Daily chart
© Dukascopy Bank SA

Hourly chart: The hourly chart shows that gold started its Monday's downfall at 3:00 GMT, when it gradually fell down to the weekly pivot point at 1,358.76. The yellow metal struggled against the weekly pivot point until 16:00 GMT, as the metal stopped dancing around the pivot point and finally stayed lower around 1,354 mark. Since then gold stayed rather unchanged, as by 5:45 GMT the commodity is trading at 1,355.50.

Hourly chart
© Dukascopy Bank SA


SWFX traders bearish on Tuesday

Traders are majorly bearish on gold, as 65% of open SWFX positions on Tuesday morning are short. In the meantime, pending orders in the 100-pip range are 62% long.

Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 57.68%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 56.65% of positions are long.

Spreads (avg,pip) / Trading volume / Volatility


Market participants foresee the price of gold at 1,350 by the end of September

Traders who were asked regarding their longer-term views on gold between June 12 and July 12 expect, on average, to see the metal around 1,350 by the end of September. Generally, 69% (+3%) of participants believe the price will be generally above 1,300 in ninety days. Alongside, 23% (-3%) of those surveyed reckon the price will trade in the range between 1,150 and 1,300 over the next three months

© Dukascopy Bank SA

Actual Topics

Subscribe to "Fundamental Analysis" feed

Subscribe
To learn more about Dukascopy Bank CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.
To learn more about Dukascopy Bank Binary Options / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Dukascopy Bank CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Crypto Trading / CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Business Introducer and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.