Gold Rises After Dovish Fed Minutes

Gold has rebounded in Thursday trading, climbing close to 1%. The spot price for the metal is at $1319 early in the North American session. Gold prices received a boost after the Federal Reserve minutes indicated that no decision had been taken on a change to monetary policy. On the release front, today’s highlight is Unemployment Claims. The markets are anticipating good news, with the indicator expected to be lower than the previous release.

Wednesday’s release of the Federal Reserve minutes was eagerly anticipated, but the minutes did not shed light on the question of when the Fed might raise interest rates. Policymakers expressed concern about speculation over this issue, but didn’t say when the central bank might change its current monetary policy. The minutes were more dovish than expected, and the US dollar responded with losses. The greenback’s losses were gold’s gain, as the metal moved higher following the Fed release.

Gold often moves higher as a result of geopolitical turmoil, as investors turn to the safe-haven commodity in times of trouble. Increasing tensions between the US and Russia over the increasingly tense situation in Ukraine has boosted gold, which was trading at $1281 just over a week ago. Ukrainian forces continue to surround pro-Russian demonstrators, who have taken over government buildings in two cities in the eastern part of the country and declared their independence. Russia has warned the Ukraine not to react with force, while the US has accused Russia of continuing to foment unrest in the Ukraine ahead of elections in May. The situation could easily spill out of control and this could lead to a negative reaction from the markets and send gold even higher.

 

XAU/USD for Thursday, April 10, 2014

Forex Rate Graph 21/1/13

XAU/USD April 10 at 13:40 GMT

XAU/USD 1319.12 H: 1324.54 L: 1310.91

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260.98 1273.78 1312.62 1338.98 1355.80 1388.54

 

  • XAU/USD has posted gains on Thursday. The pair dipped to a low of $1324.54 late in the European session, its highest level since late March.
  • 1312.62 is providing support. This is followed by a support level at 1273.68
  • 1338.98 is providing strong resistance.
  • Current range: 1312.62 to 1338.98

Further levels in both directions:

  • Below: 1312.62, 1273.78, 12.60.98, 1241.75 and 1215.64
  • Above: 1338.98, 1355.80, 1388.54 and 1403.24

 

OANDA’s Open Positions Ratio

XAU/USD ratio is made up of a strong majority of long positions, reflecting a strong trader bias towards gold moving higher against the US currency.

Gold has moved higher in Thursday trading. XAU/USD is steady early in the North American session.

 

XAU/USD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 314K.
  • 12:30 US Import Prices. Estimate 0.2%.
  • 14:30 US Natural Gas Storage. Estimate 15B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -76.5B.

*Key releases are highlighted in bold

*All release times are GMT

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.