- 52% of all SWFX open positions are short, as the sentiment became bearish on Monday
- Prices reached above the 1,350 level on Tuesday morning
- Gold has set a northward direction
- Economic events to watch over the next 24 hours: US PCE Price Index (June); US Personal Income (June)
US manufacturing activity contracted in July after Britain's decision to leave the European Union, official data from the Institute for Supply Management (ISM) revealed on Monday. The ISM announced that its Purchasing Managers' Index (PMI) came in at 52.6 points in the seventh month of the year, compared to last month's 53.2, its highest one-year result, whereas market analysts anticipated a slight decrease to 53.1 in the reported month. Nevertheless, the Index remained above the 50 level, which indicates expansion in manufacturing. The Index is based on data collected from about 400 manufacturing firms across the United States. Other data released on Monday showed the US manufacturing sector remained in the expansionary region, as the seasonally adjusted Markit final Manufacturing PMI for the United States equals 52.9 points in the same month, following last month's 51.3 mark and hitting its highest level since October 2015, when it climbed to 54.1 points. The July flash PMI posted 52.9, while economic desks expected the preliminary reading to come in at 51.5 points.
The number of people filing for unemployment benefits in the United States last week rose more than expected, fresh figures from the Department of Labor revealed on Thursday. Initial jobless claims grew by 14,000 to 266,000 in the week ended July 23, compared to the previous week's revised figure of 252,000, while market analysts expected jobless claims to rise by 9,000 to 261,000 in the reported week. Nevertheless, the less volatile and closely watched four-week moving average fell 1,000 to 256,500 in the preceding week, the lowest level since April. Furthermore, this week marked the 73rd consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. Meanwhile, the number of people continuing to receive unemployment aid increased by 7,000 to 2.14 million in the week ended July 16, whereas the four-week average of continuing jobless claims dropped to the lowest level since November 2000. The Federal Reserve said on Wednesday that conditions in the US labor market improved significantly and that the latest indicators pointed to some increase in labor utilization. As markets expected, the US central bank left its key interest rates unchanged at its meeting on July 27, citing concerns over low inflation.
Upcoming fundamentals: US PCE Price Index and personal income changes
On Tuesday there are few data releases, which will affect the yellow metal prices. At 12:30 GMT PCE Price Index for June on a month-to-month and annual basis will be released. At the same time US Personal Income and Spending monthly changes for June will be published, and both of them are forecasted to be at 0.3%.
Gold fluctuating around 1,350 level
Daily chart: The yellow metal moved slightly higher on Monday, as it ended day's trading session just above the 1,350 mark at 1,351.96. However, on Tuesday morning the metal had fallen lower, as it was trading at 1,349.20 by 5:00 GMT. In addition, the bullion had touched and rebounded against the monthly pivot point at 1,345.31. Although, the daily aggregate technical indicators forecast no changes for the metal during only the next hour, and a surge will begin for the commodity later today.Daily chart
Hourly chart: The hourly chart shows that the yellow metal was trading flat up to 12:00 GMT on Monday, as the metal was fluctuating around the 1,348 level. At 12:00 GMT gold had surged to 1,354 by 19:00 GMT. However, it later moved back lower to the previous level of 1,348 by 2:00 GMT on Tuesday, as the bullion bounced off the upper Bollinger band. Since then the commodity had slightly surged, as it was trading at 1,350.75 by 5:45 GMT.
Hourly chart
SWFX sentiment unchanged on Tuesday
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 63.30%. In the meantime, SAXO bank clients are less bullish on the yellow metal, as 56.90% of positions are long.