- 66% of all SWFX open positions are bearish
- Prices fluctuate around the 1,280 level
- Gold touched the 1,275 level on Friday
- Economic events to watch over the next 24 hours: US Retail Sales (May);
A survey indicates that consumers became more concerned about the US economy. Their rating of government economic policy suddenly dropped to the weakest level in almost two years. The recent data shows the growing gap between the most favourable assessments of Current Economic Conditions since July 2005, as well as renewed downward trend of the Expectations Index, which fell by a rather modest 8.6% from the January 2015 peak. Also, the University of Michigan's preliminary consumer sentiment index managed to advance, and was higher than expectation for the current month, but still went down compared to the preceding month's level. The index was 94.3, outperforming the estimates for 94, but still down from 94.7 mark. Moreover, consumers hint that they might increase their savings and delay spending if the pace of job creation does not accelerates. Also, they supposes that inflation will have a minimal impact on their real incomes since long-run inflation expectations plunged 0.2 percentage points to 2.3%, to its record low. In the meantime, consumers do not think the economy is as strong as it was last year period as well as do not anticipate the economy will show the same financial health in the year ahead as they anticipated a year ago.
According to the data released by the National Bureau of Statistics of China, the indicators of industrial production and retail sales continue their growth in May. Industrial production went up 6% on a yearly pace in May, the same as the previous month, while retail sales jumped by 10%, almost in line with April's data, when it accelerated by 10.1%. Overall, the economic powerhouse in June appears to be stable. However, weakening private sector investment has raised concerns about the medium-term prospects. The pace of Chinese investment growth slowed notably during the first five months of this year, driving the world's second-largest economy and renewing uncertainty over its prospects. Fixed asset investment growth weakened to 9.6% in the January-May period as tepid demand and industrial overcapacity continued to weigh on the economy. This data could be compared to the 10.5% rise in the four months through April. Investment in real estate weakened, growing at 7% between the same period of four months compared to the same period last year.
Upcoming fundamentals: US retail sales
US retail sales changes are set to be released at 12:30 GMT, and they will affect the US Dollar, which subsequently will affect the yellow metal's price. In addition to the monthly retail sales data, the U.S. Census Bureau will release the control core retail sales and retail sales excluding auto. Simple retail sales and control core retail sales are forecasted to be at 0.3%. However, previously retail sales increased by 1.3%, and control core sales surged by 0.9%. All in all, experts are awaiting for data, which would confirm that the US retail sector has calmed down after unexpected gains in previous month.
Gold suffers first losses in a week on Monday
Daily chart: The yellow metal had been gaining strength for almost a solid week since June 7, and it seemed that the bullion is about to reach the 1,300 mark this week. However, the metal declined on Monday from 1,283 at the start of Monday's trading session to 1,280 at the end of day's trading. However, as gold kept being volatile, it did not pass or even touch the support below provided by the first monthly resistance at 1,278.62. The support below is stronger than the resistance of weekly R1 at 1,289.03, and for the metal upwards, on the way to the 1,300 level, there are no more resistances.Daily chart
Hourly chart: The hourly chart shows that the bullion has stopped flirting with the upper Bollinger band and has moved to the lower Bollinger band and even shifted it downwards. At the moment, the metal is struggling with the support provided by the first monthly resistance at 1,278.62, and simultaneously the 55-hour simple moving average is closing in at 1,276.61. If the pair rebounds from the monthly R1, it will face the daily pivot point at 1,280.68 together with the 20-hour simple moving average represented by the middle Bollinger band at 1,281.00.
Hourly chart
SWFX traders majorly increase their bearish positions on Tuesday morning
Meanwhile, OANDA Bank clients are bullish with respect to the bullion, precisely in 56.73%. However, SAXO bank clients have returned to the bullish side after having become bearish on Mondays, as 52.66% of all open positions are long.