- Bullish market share rallied to 73%, the highest level since early August
- Markets are waiting for US retail sales report on Friday
- Five out of eight daily technical indicators recommend selling the precious metal
- Economic events to watch in the next 24 hours: German and French CPI (Oct); Euro zone Industrial Production (Sep); ECB President Draghi Speaks; US Unemployment Claims (Nov 6), Crude Oil Inventories (Nov 6) and Monthly Budget Statement (Oct); FOMC Members Yellen, Lacker, Bullard, Evans, Dudley and Fisher Speak; Japanese Industrial Production (Sep) and Tertiary Industry Activity (Sep)
Returning back to gold, it continued to trade near the lowest level in three months, as investors are awaiting US interest rate hike in December and looking for more hints from the Fed officials speaking later in the session. Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, dropped to 663.43 tonnes on Tuesday, the lowest level since September 2008 when Lehman Brothers filed for bankruptcy, spurring a global financial crisis. Meanwhile, low bullion prices spurred demand for physical gold, with buying of gold including coins, jewellery, bars surging to the highest level in two years.
New Zealand manufacturing activity continued to increase in October, albeit at a slower pace than a month earlier. The BNZ-BusinessNZ performance of manufacturing index dropped to a seasonally adjusted 53.3 last month, down from 55 in September, marking the lowest level since May. The nation's manufacturing sector has been growing since October 2012. Even though four of the five sub-sectors of the index dropped, all but finished stocks remained in expansion. The data showed the measure of new orders fell to 55.9 from 57.4 in September, production declined to 53.1 from 57.5, deliveries dropped to 52.5 from 55.2, and finished stocks decreased to 49.2 from 52.4. Meanwhile, employment rose to 52.4 from 51.1.
Japan's machinery orders increased in September for the first time in four months, but firms predict modest gains in orders in the final quarter of the year, signalling the economy's rebound from the recession could be slow. Core machinery orders soared 7.5% in the reported month, beating economists forecast for a 3.3% gain, and following the 5.5% decline in August. Machinery orders, excluding ships and utility items plunged 10.0% in the third quarter, but were seen to pick up 2.9% in the three months through December. Policy makers are counting on increases in business investment to create new jobs, boost productivity and underpin growth. The machinery orders data indicates the Japanese government faces a challenge to persuade companies to invest.
Upcoming fundamentals: Six Fed's FOMC members to speak a lot on Thursday
There are many members of the Federal Open Market Committee who are going to deliver speeches in the next 24 hours. Chair of the Fed Janet Yellen will talk at the Conference on Monetary Policy Implementation in the Post-Crisis Period in Washington DC. Fed Governor Stanley Fischer will also speak at the same conference. Meantime, Chicago Fed President is going to speak about monetary policy and economic perspectives in Chicago, and he will face audience questions after that. New York Fed President William Dudley will also mention monetary policy and economic outlook in his speech to the Economic Club in New York.
Gold prepares for more fundamental impetus
We continued to observe very calm trading of the precious metal yesterday. Price is currently placed slightly above this week's low at 1,088. Some momentum can be generated by the Fed Chair Janet Yellen's speech on Thursday and US retail sales data tomorrow. Short traders see the Buck higher at 1,070 in terms of gold prices. Bulls see monthly S1 (1,100) as their main resistance for the moment. Meantime, trading volume declined to four-day low yesterday. RSI technical indicator suggests that gold remains oversold after a sharp sell-off in the beginning of November.Daily chart
As expected, XAU/USD paid no attention to the bearish pattern's upper boundary as it continues to develop in a sideways trend. With 200-hour SMA preserving its downward slope, we see more bearish pressure in the next few days.
Hourly chart
SWFX bullish share skyrockets to highest level since early August
Meantime, OANDA's long traders are also holding more than three out of every four open positions at the moment, namely 75.66% in the morning on Thursday. Additionally, almost 74% of SAXO Bank clients preserve their positive stance with respect to gold.