- 56% of all SWFX open positions are short
- Gold surged gradually during the last trading session
- Economic events to watch over the next 24 hours: US JOLTS Job Openings (July)
Fewer jobs were created than expected in the United States last month, official data revealed on Friday. According to the Labor Department, total nonfarm payroll employment in the country jumped 151,000 in August, following July's upwardly revised gain of 275,000, whereas market analysts expected the economy to add 180,000 new jobs in the reported month. Over the past three months, job gains averaged 232,000, compared with 182,000 for the first eight months of 2016. Furthermore, average hourly earnings advanced 0.1%, down from July's 0.3%, while the average workweek dropped to 34.3 hours in the same month from July's 34.4, leading to a 0.2% decline in the index of aggregate weekly hours. Over the past month, job growth in construction and manufacturing was weak, while strong in retail, healthcare, leisure, and government sectors. The headline unemployment rate remained unchanged at 4.9%, whereas economic desks anticipated a slight deceleration to 4.8% during the reported period. Average hourly earnings held steady at 2.4% in the same month. On Wednesday, payroll processor ADP said US companies created 177,000 new jobs in August, slightly surpassing the 174,000 market forecast. The report put into question the possibility of an interest rate increase by the Federal Reserve at its September meeting.
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.
Upcoming fundamentals: US JOLTS Job Openings
Wednesday is a quiet day for the yellow metal affecting fundamental data releases, as the only notable information will be the US JOLTS Job Openings. The employment related data publication is set for 14:00 GMT, and it will show the number of new job openings for the month of July.
XAU/USD surges above 1.350 level on Wednesday
Daily chart: The yellow metal continues to surge on Wednesday, as the commodity broke the resistance put up by the monthly R1 at 1,348. 50 on early morning. Previously, the metal surged from 1,325.65 at the start of Tuesday's trading session to 1,348.50 by the end of day's trading. During the surge various resistance levels where broken, including the recent, short term channel upward trend, which is no longer in place. During the rest of Wednesday the yellow metal is most likely to continue the surge, as it faces next the upper Bollinger band at 1,358.51.Daily chart
Hourly chart: On the contrary to most other financial instruments, which are pegged against the US Dollar, gold did not surge only on the fundamental news coming from the US. The yellow metal began to score gains, when it broke off from the monthly PP at 6:00 GMT. The metal kept surging until the it reached the combined resistance put up by the weekly R2 at 1,346.69 and monthly R1 at 1,348.50. It can also be seen that the metal has just recently also fully broken through the before mentioned resistance cluster and has begun a surge.
Hourly chart
Trader sentiment indicates at an upcoming surge
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 60.48%. In the meantime, SAXO bank clients are bearish on the yellow metal, as 51.41% of positions are short.