- SWFX traders are 54% bullish
- 60% of pending commands are to buy the metal
- The bullion opened at 1,232.39
- Upcoming Events: US Building Permits; US Philly Fed Manufacturing Index; US Unemployment Claims; US Housing Starts
US consumer prices posted the largest increase since February 2013 last month amid higher gasoline prices, keeping the Federal Reserve on course to raise interest rates further this year. The US Commerce Department reported on Wednesday its headline CPI climbed 0.6% month-over-month in January, while analysts expected the Index to remain unchanged from the prior month at 0.3%. Excluding volatile items, core consumer prices rose 0.3% last month, after growing 0.2% in December. The January inflation jump was mainly driven by higher gasoline, apparel and motor vehicles prices. On Tuesday, the Fed Chair Janet Yellen said the Bank would probably raise rates at its next policy meeting.
In the meantime, the so-called core PPI, which excludes volatile items, jumped 0.4% month-over-month in January, compared with analysts' expectations for an unchanged reading of 0.2%. Year-over-year, core producer prices grew 1.6% last month, following December's gain of 1.7% and providing support for the view that the Federal Reserve could raise rates in the upcoming months as promised. Back in December, the Central bank raised its overnight rate to a range of 0.50-0.75% and projected three more rate hikes in 2017. The Federal Reserve Chair Janet Yellen said on Tuesday that the Bank would probably increase rates already at its next policy meeting in March. Following Janet Yellen's comments, the US Dollar hit its three-week high against a basket of currencies, while US government bonds dropped markedly.
Upcoming events: Various US data in the noon
Traders have to keep their attention at its highest at 13:30 GMT. At that time a US data package will be released. The package will consist of US Building Permits; Philly Fed Manufacturing Index, US Unemployment Claims and, in addition, the US Housing Starts. Stay tuned into Dukascopy Live Webinars to see the coverage of the release.
Gold trades above 1,235
Daily chart: The yellow metal surged on Thursday, as the bullion found support on Wednesday and continued the surge during the early hours of Thursday's trading session. The rebound occurred against the 20-day SMA at 1,216.26, and the bullion managed to reach above the 1,235 level during today's trading. However, this might be the end of the surge, as the commodity price faces the combined resistance of the monthly R1 at 1,237.68 and the upper trend line of the long term descending channel pattern at 1,238.67.Daily chart
Hourly chart: The hourly chart shows that the yellow metal's price is unlikely to breach the cluster made up of monthly R1 and the long-term trend line near the 1,238 mark, because on the hourly chart the upper Bollinger band is closing in from the upside at 1,239.88. However, strong supporting cluster of 20, 55, 100, 200 –day SMA's around the level of 1,230 might push the price upwards.
Hourly chart
SWFX traders remain bullish
OANDA Gold traders have a bullish outlook on the yellow metal, as open positions were 64% bullish on Thursday. Meanwhile, traders of SAXO bank have decreased their bullish outlook, regarding the yellow metal, as 61.49% of open positions are bullish, compared to 63.84% yesterday.