- 57% of all SWFX open positions are long
- Gold opened Friday's session at 1,258.13
- The 1,250 psychological level recently played a large role
- Economic events to watch over the next 24 hours: US Retail Sales; US PPI; FOMC Member Rosengren Speaks; US Prelim UoM Consumer Sentiment; Fed Charwoman Yellen Speaks
The number of Americans guling for unemployment beneguts remained at its 43-year low last week, official gugures showed on Thursday. According to the US Department of Labor, initial jobless claims held at a seasonally adjusted 246,000 in the week ended October 8, while market analysts anticipated a slight increase to 252,000 during the reported period. Meanwhile, the preceding week's gugure was revised down to 246,000 from the originally reported reading of 249,000. It was the 84th consecutive week of initial claims remaining below the 300,000 level, the longest streak since 1973. The four-moving average of claims, considered a better measure of labor market trends, declined 3,500 to 249,250 last week, the lowest level since November 1973. The data also showed the number of continuing claims decreased 16,000 to 2.05 million in the week ending October 1, the lowest level since June 2000, while its four-week moving average fell 25,750 to 2.07 million. In a separate report, the Department of Labor said import prices rose 0.1% month-over-month in September, following August's 0.2% drop and meeting analysts' expectations. On an annual basis, import prices declined 1.1% in the same month, compared to the previous month's 2.2% fall.
On Wednesday the Fed released the minutes of its September meeting, once again refraining from raising interest rates. Several FOMC members expressed desire to raise rates, while others stated that a rate hike would be required 'relatively soon'. It was the gurst time in guve years when more than two officials voted for an immediate rate hike. Some Fed policy makers still have concerns over the strength of the labor market and inflation, thus, more evide of US economic growth is required. Inflation has been below the Fed's 2% target, namely at 1.7%, but it was still argued that the levels are quite close to expectations and there are few signs of inflationary pressures. Some argue that the Fed was somewhat hawkish, but these minutes had little impact on the markets, as they brought more uncertainty, not necessarily suggesting a rate hike will occur in December, despite Fed Chair Jannet Yellen and several other officials stating that they would raise rates by year's end if inflation and employment gugures keep improving. Although there are two more Fed meetings scheduled in 2016, a move in November has been basically ruled out due to US presidential elections. According to CME Group's data, a December rate hike is currently seen with a probability of slightly more than 60%.
Upcoming fundamentals: US Retail Sales and Yellen's speech
The first notable time to watch the markets will be 12:30 GMT. At that time the US Retail Sales data and US PPI will be released. Moreover, at the same time FOMC Member Rosengren will give a speech. Afterwards, at 14:00 GMT the Preliminary UoM Consumer Sentiment will be released. However, those events might as well be ignored, as the most important information will be said by Janet Yellen at 17:30 GMT, as she is set to give a speech.
Gold remains stuck on Friday
Daily chart: The yellow metal threaded lower on Friday morning, as it was in the continuation of the bounce off from a resistance, which occurred in the second half of Thursday's trading session. Previously, as forecasted, the bullion moved up to the 200-day SMA and bounced off it due to the resistance it has been providing in the past five trading sessions. Afterwards, the metal moved lower and it continues the move on Friday. However, it seems that a new support level has shown itself, which is propping the metal higher and higher.Daily chart
Hourly chart: The hourly chart for the yellow metal reveals, that the 55 and 100-hour SMAs have become secondary in dictating the metal's short term fluctuations. However, the combined strength of the 20, 55 and 100-hour SMAs did manage to hinder the commodities fall after it rebounded from the 200-day SMA.
Hourly chart
Traders don't change their views
Meanwhile, OANDA Bank clients remain majorly bullish with respect to the bullion, as on Friday morning 77.55% of all positions were long. In the meantime, SAXO bank clients show a similar trend with 64.34% of all positions being held by bulls.