- 52% of all SWFX open positions are long
- The yellow metal's price was dictated by US politics
- In the aftermath of Donald Trump's victory in the US presidential election gold fell after an initial spike
- Economic events to watch over the next 24 hours: US PPI; US Capacity Utilization Rate; US Industrial Production
US retail sales posted a better than expected increase last month, suggesting economic strength and increasing chances for a December interest rate hike. The US Department of Commerce said on Tuesday retail sales climbed 0.8% on a monthly basis in October, following September's upwardly revised gain of 0.5% and surpassing the 0.5% increase forecast. Year-over-year, retail sales grew 4.3% last month. Excluding volatile items such as motor vehicles and parts, retail sales advanced 0.8% in October, whereas economists expected them to increase just 0.5%. Meanwhile, the preceding month's reading was revised up to 0.7% from the originally reported rise of 0.5%. The October stronger than expected retail sales supported the view that the Federal Reserve will raise interest rates at its next policy meeting on December 13-14. The last time the Fed increased its key rate was December 2015, and kept its steady since then because of low inflation rates. Back in the Q3, the US economy expanded at an annual rate of 2.9% and it is set to grow 3.1% in the Q4, according to the latest economic growth forecasts released by the Atlanta Fed. As a result, the US Dollar jumped markedly against the Euro, with the EUR/USD pair declining to $1.0733 from $1.0759 ahead of the release.
Mood of Americans shoppers improved more than expected in November, after falling to its lowest level since 2014 in the previous month, a flash survey showed on Friday. The Consumer Sentiment Index produced by the University of Michigan came in at 91.6, up from October's final reading of 87.2, while market analysts anticipated s slight acceleration to 87.4 points. The survey was conducted before the results of the US presidential elections were announced. Furthermore, the Index was 0.3% higher than at the same time last year, and surpassed the current year's average of 91.1 points. Meanwhile, the sub-gauge of current economic conditions advanced 2.6% to 105.9, and the sub-gauge of future expectations increased 7.4% to 82.5 from the prior month's 76.8 points. Consumer sentiment managed to improve in November, even though long-term and short-term inflation expectations climbed to 2.7%, after touching a record low of 2.4% in October. Richard Curtin, chief economist of the survey, said that it may be a one-month phenomenon. Nevertheless, he added that the November data may be enough to justify a December rate hike. The EUR/USD pair fell immediately to 1.0872 from 1.0873 ahead of the release.
Upcoming fundamentals: US data
During today's trading session fundamental data affecting the markets will come from the US. At the forefront and the strongest indicator of the strength of the US economy and the Greenback will be the PPI at 13:30 GMT. Afterwards, at 14:15 GMT US Capacity Utilization Rate and US Industrial Production data will be available.
Gold approaches 1,240 mark
Daily chart: The yellow metal moved slightly to the upside on Wednesday morning, however, its gains could more be described as remaining flat. Previously, on Tuesday the bullion changed its course after falling for three consecutive trading sessions, and the metal also erased all of the Monday's losses. The commodity price is set to encounter resistance at 1,238.39, where the monthly S1 is located at. Afterwards, gold is likely to move lower. Moreover, such a hypothesis is also supported by the daily aggregate technical indicators.Daily chart
Hourly chart: The hourly chart reveals that the yellow metal passed and steered clear of the 55-hour SMA at 20:00 GMT. At that time the volatility of the bullion and volume were both almost gone. Afterwards, the commodity price went up, and it has set its course for the monthly S1 at 1,238.40, which now is reinforced by the 100-hour SMA.
Hourly chart
SWFX sentiment remains unchanged
OANDA open long positions have slightly decreased and are at 77.17%, compared to 78.48% on Tuesday. SAXO bank traders remain long, as 64.95% of traders were long on Wednesday morning, compared to 67.71% during the previous session.