- Bullish market share tumbled to the lowest level in 18 days, down from 71% to 67%
- Key resistance and support are represented by July low at 1,070 and 2010 low at 1,044
- Daily studies see the precious metal lower, weekly indicators are unclear this time
- Economic events to watch in the next 24 hours: German Factory Orders (Oct); US Non-Farm Employment change (Nov), Average Hourly Earnings (Nov), Trade Balance (Oct) and Unemployment Rate (Nov); Swiss CPI (Nov); Canadian Trade Balance (Oct), Net Change in Employment (Nov), Unemployment Rate (Nov) and Ivey PMI (Nov)
Gold was poised to snap a six-week losing streak as a depreciation in the US Dollar pushed the precious metal above 2010 lows ahead of the important US non-farm payrolls report later in the session. Bullion surged almost 1% overnight after the ECB expanded its monetary stimulus programme, boosting the Euro and sending the Greenback to a one-month low. Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, remained at their lowest since September 2008. Now all eyes turns to key US job report, with a strong data is likely to cement the case for a US rate hike in December, supporting the US Dollar and hurting gold.
Business activity in the UK services sector rose at the fastest pace in four months in November, suggesting a stronger economic growth in the final quarter of the year. The Markit/CIPS UK services PMI climbed to 55.9 last month from 54.9 in October, offsetting the weakness in manufacturing and construction sectors. There were some signs in the services survey that price pressures were building, albeit from low levels. Input prices, which include wages, rose at the fastest pace in four months, something that is likely to cheer up the Bank of England. Markit's UK composite PMI, which combines data from the manufacturing, services and construction surveys, was steady in November at 55.7, the highest level since July. The British economy is on track to grow 0.6% in the fourth quarter, accelerating from the 0.5% pace in the July-September period. The Office for Budget Responsibility revised up the growth outlook for next year, saying it predicts the UK economy to grow by 2.4% in 2015 and 2016 - up one basis point for 2016 when compared to the July outlook. It also upped the growth outlook for 2017 by one basis point to 2.5%, before sliding to 2.4% in 2018, and slightly lower to 2.3% in 2019-2020.
Retail sales in Australia rose in October, as Australians were more willingly open their purses in the lead up to Christmas, adding to signs that consumer confidence is gaining momentum. According to the Australian Bureau of Statistics, the retail sector recorded a seasonally adjusted 0.5% gain in turnover in the reported month, following a 0.4% increase in both August and September. The biggest contributor to the advance was department stores, where sales surged 3.5%. Measured on an annual basis, retail sales advanced 3.9%, which was below the pace of growth seen in recent years. The Australian Retailers Association and Roy Morgan Research predict Australian shoppers to spend $46.8 billion this Christmas, in the six weeks from November 15 to December 24.
Upcoming fundamentals: US and Canadian labour market data to drive markets on Friday
Everyone is watching the labour market data from Canada and the US on Friday, which is going to be out at 13:30 GMT. US economy is predicted to have generated 201,000 jobs in November and the rate of unemployment is awaited to be unchanged at 5%. In addition to that, experts foresee the wage growth of 0.2% in November, down from a 0.4% rise in October. As for Canada, their change in employment has probably been negative of 9,700 last month. However, it will succeed a surprising increase of 44,400 jobs in October of this year. Meanwhile, Canadian Ivey PMI, calculated for all major industries, is expected to grow from 53.1 points in October to 55.3 points in November.
Gold supported by ECB decision as trading volume spikes
The precious metal hovered in positive direction on Thursday, especially pricing in the "hawkish easing" from the ECB, which sent the Dollar strongly lower in the market. In the past two weeks we have seen more green candles appearing in the daily chart. It proclaims that an active phase of losses has probably come to an end, as markets are refocusing from the ECB to the Fed. We expect the bullion to trade predominantly sideways, unless either July low at 1,070 or 2010 low at 1,044 is breached. The mid-term projection, however, will continue carrying the bearish bias.Daily chart
In the one-hour chart gold is going to confront the 200-hour SMA in the nearest future, in case the price growth takes place further. There we see another failure occurring, judging by the past experience which highlights inability of XAU/USD to consolidate above the moving average for several times. Moreover, another downtrend line at 1,069 offers more selling pressure for the bullion.
Hourly chart
Bulls below 70% for the first time in a month
The yellow metal remains heavily overbought in both OANDA and SAXO Bank markets. The former's bullish clients are holding 71.82% of all trades, while SAXO Bank traders are gold-long in 72.10% of all cases.