- Bullish SWFX market share is flat at 52%
- After breaching Aug high, the next demand is provided by 1,155
- Daily technical indicators are showing slightly bullish signals at the moment, weekly ones remain mixed
- Economic events to watch in the next 24 hours: French, German, and Euro zone Manufacturing/Services PMI (Oct); Italian Industrial Orders (Aug) and Retail Sales (Aug); US Manufacturing PMI (Oct), Canadian CPI (Sep)
Gold traded near its two-week low on Friday amid a stronger US Dollar and expectations that the Fed remains on track to hike interest rates this year. For the week, the yellow dropped 1%, the steepest decline in six weeks and after enjoying two-week winning streak. The Greenback was supported by positive unemployment and existing home sales data, whereas the Euro tumbled following ECB President Mario Draghi speech. The number of Americans seeking unemployment benefits rose less than expected last week, but the figure remained at a historically low level. Initial jobless claims rose by 3,000 to a seasonally adjusted 259,000 in the week ended October 17. Separately, home resales increased 4.7% last month to a seasonally adjusted rate of 5.55 million units, compared with the market consensus of 5.38 million.
Among other fundamentals around the world, Canada's retail sales data surprised to the upside, posting better than expected numbers in August. Sales increased for the fourth consecutive month, jumping 0.5% to C$43.6 billion in the reported month, reaching the highest dollar-value on record, according to Statistics Canada. Moreover, July's figure was revised upwards to show a 0.6% gain. Volume also increased 0.7% in August, marking the biggest rise since February. The freshly released numbers provided an upbeat outlook for the monthly and quarterly GDP figures as well as the Loonie Dollar, as sales beat market consensus, which had expected to see a modest 0.1% increase. Meanwhile, core retail sales, which exclude volatile automobile and parts sales, remained flat, following an upwardly revised 0.1% tick up in July.
Upcoming fundamentals: Canadian mixed inflation data
Canada's core CPI has probably gained 0.3% in September on a monthly basis after a rise of 0.2% a month before, the Statistics Canada numbers will reveal today at 12:30 GMT. The headline reading, however, is estimated to fall by 0.1% in the same month, following no change in August. The indicator is closely watched by the Bank of Canada, which sets interest rates in accordance with changes in consumer prices. Meanwhile, US production sector's activity continued to advance in October, according to the PMI survey. The index will be published at 13:45 GMT as market forecast assumes the result of 52.8 points, down from upward-revised 53.1 points in September.
Gold avoids sharp downward moves
Expectations with respect to gold perspectives remain moderately pessimistic, even though the bullion rejected the idea of moving strongly to the south yesterday. This outlook will be in place, as long as the price remains below the Aug high. Closest demand, the main target for bears, is placed around the 1,155 mark, which is built by weekly S1, 20-day SMA and Oct 12 low. Additional pressure is created from the upside by the 200-day SMA, currently at 1,174.Daily chart
The bearish channel has emerged in the one-hour chart. The present phase of development, however, implies either a sideways movement or a slight increase in value. Resistance is represented by the Aug high at 1,170, followed by the 200-hour SMA at 1,172.
Hourly chart
SWFX sentiment unchanged at 52%
Meanwhile, OANDA's market sentiment has been mostly unchanged during the past 24 hours as the bulls' portion hovers just above 50% at the moment. In addition, 55% (53% yesterday) of SAXO Bank clients continue to assume that the precious metal is going to gain value.