- 52% of all SWFX open positions are short
- Prices fell below 1,340 level on Thursday
- A huge fall was caused by US Non-Farm Payrolls data last Friday
- Economic events to watch over the next 24 hours: US Retail Sales (July); US PPI (July); US UoM Confidence Preliminary (Aug); Baker Hughes US Rig Count Crude Oil (August 12)
According to the Labour Department Thursday's release, the number of people filing for unemployment benefits went down during the last week, figuring out that stable labour market strength in early August that could help speed up economic growth. The number of Americans filing for unemployment benefits dropped 1,000 to a seasonally adjusted 266,000 in the August 6 week. Initial claims have been below the key 300,000 level for the past 75 weeks in a row, showing the longest streak since 1970 as well as did not depict any signs of rising. Meanwhile, economists polled by Reuters had forecast initial claims reaching the 265,000 mark in the latest week. Also, Labour Department highlights there were no special factors influencing last week's claims data and no states had been estimated. Moreover, summer usually brings turbulences in weekly figures due to the re-equipment of auto plants. However, this summer, weekly claims figures have been more or less consistent, around 270,000 or fewer for the past eight weeks. The another report showed the US natural gas futures plunged to a two-month low in North America, after data revealed that natural gas sup
On Wednesday, at the conclusion of RBNZ August monetary meeting the Reserve Bank of New Zealand cut interest rates by 25 basis points, taking the deep of a record-low rate equalling 2%. The decision made by Reserve Bank of New Zealand met market expectations by delivering a rate cut and hinted that more monetary policy easing might be added in future. Nevertheless, some economists still were expecting RBNZ to cut harder, with the Kiwi dollar going down as soon as the decision was announced. Moreover, according to the RBNZ, the annual inflation rate is expected to begin recovering during the last quarter of this year. Also, the RBNZ pointed out, that firm actions could be started until early 2017, hinting the central bank will wait at least some time in order to reassess the necessity of another cut. The officials said the buoyant housing market resumes to pose financial stability risks and promised to consult on stronger macro measures. It is worth to point out, the RBNZ has another challenge alike as the Australia's RBA in lowering interest rates - managing the rising risks of a housing bubble. In the meantime, despite the talks the exchange rate is too high, while inflation too low, the signals that more easing is coming in near future, the New Zealand dollar advanced following the rate cut, jumping to its highs of .7341 after the decision.
Upcoming fundamentals: US Retail Sales and PPI data
Together with the end of the week, a lot of data will be released on Friday. Starting 12:30 GMT statistics will be published in the US, as retail sales and the PPI data for July will be out. The retail sales data will consist of three various indicators, as Retail Sales Control Core, Retail Sales Ex Auto and general Retail Sales will be released. In addition, the PPI will be available not only on monthly and yearly basis, but also the change will be published excluding food and energy. At 14:00 GMT the US UoM Confidence Preliminary index will be published for August. Last but not least, Baker Hughes US Rig Count for crude oil will be out at 17:00 GMT.
Gold in limbo near 1,340 on Friday
Daily chart: The yellow metal did not manage to break the resistance put up by the weekly and monthly pivot points around the level of 1,345, as the commodity price fell just below the 20-day SMA at 1,338.56. On Friday morning, by 5:30 GMT the bullion had bounced above the simple moving average, as the session was opened higher at 1,338.98 than the previous close of 1,337.76. It is most likely that gold will move back up and approach the pivot points once more. However, the metal had been more volatile to the downside and even reached below the 20-day SMA on Friday morning.Daily chart
Hourly chart: The hourly chart for gold shows that the yellow metal was first struggling with the 55-hour SMA at 1,342 on the morning of Thursday until it broke through its resistance and moved to the combined resistance cluster of the weekly and monthly pivot points and the 20-hour SMA around the level of 1,345. The metal struggled with the resistance cluster for seven hours. At 14:00 GMT the commodity broke free from the cluster and surged past the 200-hour SMA at 1,349.42 and upper Bollinger band at 1,350.10. However, it suddenly changed its direction and fell to 1,337.71 by 21:00 GMT. Afterwards the commodity surged to the 100-hour SMA at 1,340 by 1:00 GMT, and it has been struggling with it since then.
Hourly chart
SWFX sentiment unchanged on Friday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 61.05%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 59.35% of positions are long.