- 57% of all SWFX open positions are long
- Gold opened Thursday's session at 1,255.37
- The 1,250 psychological level once more stopped the metal's fall
- Economic events to watch over the next 24 hours: US Unemployment Claims; US Import Prices
On Wednesday the Fed released the minutes of its September meeting, once again refraining from raising interest rates. Several FOMC members expressed desire to raise rates, while others stated that a rate hike would be required 'relatively soon'. It was the gurst time in guve years when more than two officials voted for an immediate rate hike. Some Fed policy makers still have concerns over the strength of the labor market and inflation, thus, more evide of US economic growth is required. Inflation has been below the Fed's 2% target, namely at 1.7%, but it was still argued that the levels are quite close to expectations and there are few signs of inflationary pressures. Some argue that the Fed was somewhat hawkish, but these minutes had little impact on the markets, as they brought more uncertainty, not necessarily suggesting a rate hike will occur in December, despite Fed Chair Jannet Yellen and several other officials stating that they would raise rates by year's end if inflation and employment gugures keep improving. Although there are two more Fed meetings scheduled in 2016, a move in November has been basically ruled out due to US presidential elections. According to CME Group's data, a December rate hike is currently seen with a probability of slightly more than 60%.
US employment growth slowed unexpectedly last month, official data revealed on Friday. According to the US Department of Labor, US private companies created 156,000 new jobs in September, while market analysts expected the economy to add 171,000 jobs in the reported month. Meanwhile, the previous month's reading was revised up to 167,000 from the originally reported gain of 151,000. Although the report suggested the economic expansion was still remaining on track, the chances of an interest rate hike at the Federal Reserve's policy meeting next month decreased markedly. However, the odds of a December rate remained quite high, despite the disappointing, despite today's disappointing jobs report. The unemployment rate grew to 5.0% in September, as more Americans re-joined the labor force. Average hourly wages rose to an annualized rate of 2.6% last month, in line with analysts' expectations, whereas the average work week grew 0.1 to 34.4 hours. A broader measure of unemployment, which includes part-time workers and people who stopped searching for jobs, held steady at 9.7% in September. Professional and job services created 67,000, health care and restaurants added 33,000 and 30,000 jobs, respectively, contributing most to the September job growth.
Upcoming fundamentals: US Unemployment Claims and Import Prices
During today's trading session traders have to keep their eyes open for the US Unemployment Claims and Import Prices at 12:30 GMT. From the both data releases the employment data is considered to historically provide more volatility to financial instruments and exchange rates, which are denominated in US Dollars.
Gold continues to gain on Thursday
Daily chart: From a technical perspective the yellow metal is continuing yesterday's rebound from the 1,250 psychological level. However, the resistance put up by the 200-day SMA has not been broken. Actually, the metal did not even properly touch during Wednesday's trading session. Although, the SMA kept moving northward, and with it additional room for the bullion was freed up, which means that there will still be some minor gains, before gold starts battling the SMA. It is highly possible that after the encounter the yellow metal will move south.Daily chart
Hourly chart: The hourly chart for the yellow metal reveals that by 3:00 GMT the metal broke past the resistance put up by the 55 and 100-hour SMAs, which kept the bullion down for the past two trading sessions.
Hourly chart
Trader sentiment remains unchanged
Meanwhile, OANDA Bank clients remain majorly bullish with respect to the bullion, as on Thursday morning 74.39% of all positions were long. In the meantime, SAXO bank clients show a similar trend with 63.67% of all positions being held by bulls.