- 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 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.
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 gainsDaily chart
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
SWFX traders bearish on Tuesday
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.