- 62% of all SWFX open positions are long
- 57% of pending commands were to buy the metal
- Gold opened Monday's session at 1,133.79
- Economic events to watch over the next 24 hours: US Flash Services PMI
Both building permits and housing starts dropped more than expected last month, suggesting that the Q4 growth rate could be possibly revised downwards. According to the US Department of Commerce, new-home construction fell 18.7%, the biggest decrease in almost two years, to a seasonally adjusted annual rate of 1.09 million units in November, while market analysts anticipated a slight deceleration to 1.23 million during the reported period. Housing starts tend to be volatile on a monthly basis. Meanwhile, the October figure was revised up to a 1.34 million-unit pace, the highest level since July 2007, from the originally reported 1.32 million. The Commerce Department also reported that building permits declined 4.7% to an annualized rate of 1.20 million units, following October's upwardly revised reading of 1.26 million, whereas economists expected them to decrease to a 1.24 million unit pace. Nevertheless, the National Association of Homebuilder's sentiment measure, released on Thursday, jumped to 70 points in December, the highest level in 11 years, compared to the previous month's figure of 63. December's increase was driven in large part by Donald Trump's surprise victory in the US presidential elections last month.
US consumer prices rose at a slower pace last month compared with October but the underlying inflation trend remained promising. On Thursday, the US Department of Labor said its Consumer Price Index advanced 0.2% in November after rising 0.4% in the preceding month as food costs moderated and the price of gasoline fell. On an annual basis, the CPI climbed 1.7%, the largest increase since October 2014, following the previous month's 1.6% gain. Analysts expected the CPI grow 0.2% on a monthly basis and 1.7% compared to a year ago in the reported month. Meanwhile, the so-called Core CPI jumped 0.2% in November after climbing 0.1% in October, driven by higher rents. Despite last month's increase, the annual core inflation rate held steady at 2.1%. Other data released on the same day showed the US Philly Fed Index jumped to 21.5 in November, up from October's 7.6 and well above forecasts of 9.1 points, whereas the Department of Labor reported the number of initial claims dropped 4,000 to 254,000 in the week ending December 10, compared to the preceding week's 258,000. After the release, the US Dollar was seen trading at 1.0419 against the Euro, 117.99 against the Japanese Yen and 1.2470 against the British Pound.
Upcoming fundamental releases: US Flash Services PMI
During Monday's trading session there is set only one macroeconomic data release to occur. At 14:45 the US Flash Services PMI is set to be released. However, this is a very minor fundamental data release, and it is highly unlikely that the data will affect the markets via an impact on the US Dollar.
Gold faces resistance on Monday
Daily chart: The yellow metal surged on Monday morning, as the bullion approached the newly calculated weekly PP at 1,140.81. Previously, on Friday gold rebounded and surged after falling for the previous week. That occurred due to the fact that the metal reached a combined support level of a medium and long term lower trend lines at 1,127 on Thursday. It is most likely that the metal will fail to break the resistance put up by the weekly PP and remain unchanged on a daily timeframe.Daily chart
Hourly chart: The hourly chart reveals that the yellow metal already attempted to break through the resistance put up by the weekly PP at 1,140.81 at 06:00 GMT on Monday. However, the resistance level stood its ground, and bullion bounced off of it. Although, it is most likely that gold will attempt to break it once more, as it is prepped up by the 20-day SMA just below the 1,140 level.
Hourly chart
SWFX sentiment stays the same
The optimistic OANDA Gold traders have found the Bullion less attractive on Monday, as open positions were 75.51% long, compared to 81.70% on Friday. Meanwhile, traders of SAXO bank seem to have slightly increased their bullish stance, as Monday showed 66.64% of traders betting the metal will surge, compared to 64.57% during the previous session.