- 50% of all SWFX open positions are long
- Gold reached a rising wedge pattern's lower trend line on Thursday
- Economic events to watch over the next 24 hours: US Building Permits; US Housing Starts
Confidence among US homebuilders improved in the ninth month of the year, official data revealed on Monday. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) jumped to 65 in September, the highest reading since October last year, whereas market analysts expected the Index to come in at 60 points. The August reading was revised down to 59 from the originally reported reading of 60. Any reading above 50 indicates an overall positive outlook. The Index was seen mostly at 58 points, rising to 61 in January. According to the report, current sales advanced to 71 in September from August's 65, the fastest pace in nearly nine years, whereas sales expectations in the next six months climbed to 71 from the preceding month's 64. In the meantime, buyer traffic rose to 48 from last month's 44 points, remaining below the 50-point level. In regional terms, on a three-month moving average basis, homebuilder confidence in both the Northeast and South increased one point to 42 and 64 points, respectively, as well as it improved in the West to 73 from last month's 69 points. The Index found builder sentiment held steady at 55 in the Midwest.
Consumer prices in the United States rose more than expected last month, official data revealed on Friday. According to the US Bureau of Labor Statistics, the overall Consumer Price Index (CPI) jumped 0.2% month-over-month in August, compared to the preceding month's reading of 0.0%, while market analysts anticipated a slighter acceleration to 0.1% during the reported month. On an annual basis, the CPI increased 1.1%, up from July's 0.8%. The socalled core CPI that excludes goods with high price volatility, such as food and energy, advanced 0.3% on a monthly basis in August after rising 0.1% in July, whereas economic desks expected the core inflation to grow 0.2% last month. On a yearly basis, the indicator climbed 2.3% during the reported period, slightly up from July's 2.2% reading. The modest rise in inflation last month is likely to be welcomed by the Federal Reserve at its meeting next Tuesday and Wednesday. However, it is widely expected to leave interest rates on hold amid weak retail sales, industrial production and job growth. Within the headline CPI basket, the price of gasoline dropped 0.9% last month, compared to July's 4.7% fall. Food prices were unchanged, whereas the cost of food consumed at home decreased for the 4th consecutive month.
Upcoming fundamentals: US Housing data
The yellow metal will be affected on Tuesday by two simultaneous data releases at 12:30 GMT in the United States. Among the two data releases the more important is the US Building Permits data, which is forecasted to be at 1.17 million. On the other hand new housing starts will be published, and they are forecasted to be a 1.19 million.
Gold tests resistance at 1,316.02
Daily chart: The yellow metal is threading higher on Tuesday morning, as by 5:00 GMT it had scored more gains than during the whole Monday's trading session. However, its surge has been hindered by the resistance put up by the weekly pivot point at 1,316.02. Daily aggregate technical indicators forecast a fall of the bullion during today's session. Although it is most likely that the metal will break through the resistance, as it would be consistent with the rising wedge pattern, in which the rate has been for more than a year.Daily chart
Hourly chart: On the hourly chart for gold it can be seen that the yellow metal attempted to break the resistance of the weekly PP for the past 24 hours. Moreover, from 7:00 to 8:00 GMT and 12:00 to 13:00 GMT the metal reached above the weekly PP. However, it did not break the resistance fully. Most recently it is trying once more to break through the cluster, as there is still the 100-hour SMA just above the PP, which provides additional resistance.
Hourly chart
Traders neutral on the bullion
Meanwhile, OANDA Bank clients are largely bullish with respect to the bullion, precisely in 76.31%. In the meantime, SAXO bank clients are also bullish on the yellow metal, as 66.49% of positions are long.