- 51% of all SWFX open positions are bullish, as the sentiment remains slightly bullish
- Prices fluctuating below 1,340 level on Thursday morning
- Gold is not setting a clear direction
- Economic events to watch over the next 24 hours: US Initial Jobless Claims (July 23); US International Trade in Goods (June)
For the second consecutive month, orders for long lasting factory goods made in the United States fell, fresh figures from the US Census Bureau revealed on Wednesday. Excluding transportation equipment, new orders for durable goods fell 0.5% on a seasonally adjusted basis in June, compared to the previous month's downwardly revised drop of 0.4%, whereas market analysts expected core durable goods orders to advance 0.3% in the reported month. Overall orders for US manufactured durable goods decreased 4.0% in June, following last month's revised fall of 2.3% and falling behind the 1.1% drop forecast. Other data released by the Energy Information Association on Wednesday showed that US crude oil inventories added 1.7 million barrels in the week ended July 22, after the 2.3 million barrel fall registered in the previous seven days, while economic desks penciled in a decrease of 2.1 million barrels in the reported period. The durable orders report stands in contrast to other recent data suggesting the US manufacturing sector stabilized in June. A Federal Reserve report showed manufacturing output was modestly above year-earlier levels in June.
As markets expected, the European Central Bank (ECB) kept its key interest rates on hold on Thursday, but signaled that it is prepared to add more monetary stimulus later in the year. The main refinancing rate was left at 0%, whereas the ECB interest rates on the deposit facility and the marginal lending facility remained unchanged at -0.40% and 0.25%, respectively. The central bank slashed its deposit rate deeper into negative territory in March. In a news conference, Mr. Draghi said the Brexit vote had added to "headwinds" for the Euro zone economy that include broader geopolitical uncertainty. Mario Draghi, President of the European Central Bank, also confirmed that the monthly asset purchases of 80 billion euros may run beyond the current deadline of March 2017, if necessary. Furthermore, the central bank's President highlighted that the governing council may provide more stimulus at its next meeting in September, as new post-Brexit forecasts for economic growth and inflation will be available by that time. Meanwhile, analysts polled by Reuters slashed their growth forecast for the Euro zone to 1.3% from 1.6%, but left inflation projections unchanged at 1.3%.
Upcoming fundamentals: Initial jobless claims and international trade
Fundamental data affecting the US Dollar from the US on Thursday is made up from the Initial Jobless Claims for the week of July 23 and the International Trade in Goods for June. Both of these numbers will be out at 12:30 GMT. Initial Jobless Claims have been a positive surprise for the whole of July, as every time they are released, the data is better than forecasted by experts. In the meantime, US international trade is expected to go southwards, as imports of the country are forecasted to increase by almost half a billion US dollars.
Gold trading flat around 1,340 on Thursday
Daily chart: The yellow metal was stuck around the level of 1,320 for the past sessions, and it seemed that it will not gain a new direction for some time. However, during Wednesday's trading session the metal surged from 1,319.22 at the start of the session to 1,338.82 at the end of day's trading. During this climb the commodity moved past three resistance levels, as the weekly PP was broken at 1,323.60. Afterwards, the price passed the 20-day SMA at 1,325.56 and weekly R1 at 1,336.44. At the start of Thursday's trading session the metal remains flat at 1,338.75.Daily chart
Hourly chart: The hourly chart shows that the yellow metal was fluctuating below the 1,320 level for the most of the day during Wednesday. However, just before the FOMC rate decision, the bullion surged from 12:00 to 14:00 GMT from 1,319.49 to 1,327.84. The next four hours afterwards gold prices remained unchanged until at 18:00 the yellow metal surged just like every other financial instrument or commodity which is pegged to the US Dollar. The metal climbed from 1,326.28 at 18:00 GMT to 1,340.90 by 20:00 GMT. Since then, the bullion has resumed trading flat.
Hourly chart
SWFX sentiment unchanged on Thursday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 64.94%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 58.24% of positions are long.