- 56% of all SWFX open positions are long
- Trader pending commands are set up to buy the metal, namely 57% of total orders
- Gold opened Wednesday's session at 1,211.84
- Economic events to watch over the next 24 hours: US Durable Goods Orders, US Unemployment Claims; US New Home Sales; US Revised UoM Consumer Sentiment; FOMC Meeting Minutes
On Monday 21 of November ECB President Mario Draghi, during his speech has urged the European Union to stay united in the face of different challenges such as Brexit as he warned that the cohesion of Europe is being tested. Speaking in the European Parliament in Strasbourg, Mr. Draghi noted that "The euro area recovery continues to proceed at a moderate, but steady, pace. It has shown remarkable resilience to adverse developments and uncertainties emanating from the global environment." said that Europe needs to respond "cohesively and decisively" to the current challenges facing Europe. Overall, Mr. Draghi maintained a neutral tone and he is not prepared at this stage to offer strong hints over the likely policy action at December's policy meeting. There were also no attempts to steamroller the ECB Council into policy action. The stated above comments will maintain expectations that the ECB is not planning to announce some form of bond-buying extension, although the details are still in discussion. In the meantime, reaction to the speech was limited as markets remained in a consolidation phase with EUR/USD finding support just below the 1.0600 level.
US consumer prices see the biggest increase in six months in October amid higher gasoline and rent costs. According to the US Department of Labor, the Consumer Price Index advanced 0.4% last month, following September's gain of 0.3%. On a yearly basis, consumer prices grew 1.6% in October, the largest annual increase since October 2014, up from the preceding month's 1.5%. Both readings came in line with analysts' expectations. Nevertheless, the so-called core CPI, which excludes prices for volatile items such as energy and food, rose 0.1% in the reported month, unchanged from September, while market analysts anticipated a slight increase to 0.2%. Year-over-year, core consumer prices fell to 2.1% in October, following the prior month's 2.2% gain. Higher inflation as well as the strong labor market are likely to encourage the Federal Reserve to raise its key interest rates at its next meeting in December. The Central bank increased its key overnight interest rate in December 2015 for the first time since the global financial crisis. The Labor Department said gasoline prices surged 7.0%, up from September's 5.8%, whereas food prices remained unchanged. Within components of the core CPI, rents rose 0.4%, while medical care costs were unchanged. The price of prescription drugs rose 0.2%.
Upcoming fundamentals: US Durable Goods Orders and FOMC Meeting Minutes
There are scheduled fundamental data releases for Wednesday, which are set to effect the strength of the Greenback and subsequently the price of the yellow metal. First of all, at 13:30 GMT the US Core Durable Goods Orders and US Unemployment Claims are set to be released. Secondly, at 19:00 GMT FOMC Meeting Minutes will be out, and those might even outweigh the rest of the events scheduled for the day.
Gold trades flat below 1,215 on Wednesday
Daily chart: On Wednesday morning the yellow metal traded just below the weekly PP, which is located at 1,214.32. Previously, on Tuesday the bullion's price fluctuated mostly above the weekly pivot point. However, by the end of the day the commodity price slipped lower and ended the day's trading session at 1,210.87. All factors researched indicate that the metal is set to fall in the upcoming sessions, and, as it was mentioned before, in that case gold would fall to at least the level of 1,200, where the next support cluster is located at.Daily chart
Hourly chart: The hourly chart reveals, what is keeping the yellow metal down. It is the 100-hour SMA, which provided resistance above the weekly PP. Moreover, most recently the SMA has reached the weekly PP at 1,214.32, and it has begun to provide additional strength to the resistance level. However, the metal gets squeezed in, as the 55-hour SMA is just below the commodity price.
Hourly chart
SWFX bullish sentiment increases
OANDA open long positions decreased and are at 80.66%, compared to 81.12% on Tuesday. Meanwhile, SAXO bank traders remain long, as on Wednesday 68.25% of traders bet the metal will surge, compared to 67.04% during the previous session.