- 52% of all SWFX open positions are short
- The yellow metal continues to move in a channel down pattern
- Economic events to watch over the next 24 hours: US Change in Nonfarm Payrolls (August); US Unemployment Rate (August); US Trade Balance (July); US Factory Orders (July); Fed's Lacker Speaks;
US manufacturing activity fell in the red territory during August despite last month's positive reading. The Institute for Supply Management's Manufacturing PMI came in at 49.4 points in the eight month of the year, following July's 52.6 hike and falling behind the 52.0 market forecast. The manufacturing sector contracted for the first time in five months; however, the overall economy expanded for 87 consecutive months, the report from the ISM showed on Thursday. Other data released by the Labor Department showed that the number of Americans filing for unemployment benefits rose to 263,000 in the week ended August 27, compared to 261,000 claims registered in the previous seven days, while economic desks anticipated a steeper increase to 265,000 during the reported period. The four-week moving average of claims, considered a better measure of labor market trends, dropped 1,000 to 263,000. This marked 78 consecutive weeks of claims below the 300,000 level, the longest streak since 1973. In the meantime, continuing jobless claims increased 14,000 to 2.16 million in the week ending August 20. As the US economy approaches full employment, there is little scope for significant further declines in claims.
Confidence among American shoppers improved unexpectedly in August, according to the Conference Board's monthly survey. The survey's Consumer Confidence Index increased to 101.1 points in the eight month of the year, compared to July's reading of 96.7, while market analysts anticipated a slighter acceleration to 97.1 in the reported month. Nevertheless, back in August 2015, the indicator was higher at 101.4 points. The survey is a closely-followed barometer of consumer attitudes towards business conditions, personal finances, jobs and short-term outlook. The data showed that 30% of respondents stated that business conditions were "good" in August, following July's 27.3%, whereas 18.4% stated conditions were "bad", unchanged from last month. 17.3% of respondents predicted an improvement in the next six months, compared to last month's 15.7%, while 11.1% predicted deterioration, down from July's 12.4%. The share of respondents expecting their incomes to improve remained resilient; however, the outlook on the job market was mixed. Consumer sentiment among Americans remained in the positive territory for more than a year. A reading of 90 or above indicates economic expansion. The US economy is mostly driven by consumer spending, which accounts for about 70% of all economic growth.
Upcoming fundamentals: US employment and trade balance
As it is the first Friday of the month, various US fundamental data releases are set to occur during the day. The US data will be released in a big chunk at 12:30 GMT, as Change in Nonfarm Payrolls, Unemployment Rate, Change in Manufacturing Payrolls, Participation Rate for August and the US Trade Balance for July are all going to be published simultaneously. Afterwards at 14:00 GMT US Factory Orders for July will be released. Moreover, the Fed's Lacker will give a speech at 15:00 GMT at Virginia Association of Economists in Richmond.
Gold falls after a surge on Thursday
Daily chart: The yellow metal is moving lower on Friday morning, as it opened Friday's trading session at 1,314.61 and started moving lower after a slight bounced above the 1,315 level. Previously, on Thursday the metal began to surge midday and ended the day's trading session above the first weekly support level of 1,310.87, which had provided resistance to the bullion. At the moment, gold faces no real resistance up to the level of 1,326.43, where the monthly PP is located at. Due to that it is possible that the metal will move to the weekly S1 and rebound against it.Daily chart
Hourly chart: The hourly chart for gold shows that the metal was falling in the first half of September 1, as it was bending the lower Bollinger band until 13:00 GMT, when fundamental data from the US started affecting the strength of the US Dollar. The metal began to surge and reached the 1,313.77 level by 15:00 GMT. During the rise of the bullion's price the resistance put up by the weekly S1 at 1,310.87 was broken. Afterwards, the metal surged to the 100-day SMA and bounced off of it at 1:00 GMT, and just recently the gold price has fallen below the weekly S1. The yellow metal struggles to find support, as mentioned before.
Hourly chart
SWFX traders slightly bearish on Friday
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 69.08%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 61.10% of positions are long.