Gold Drifting As Unemployment Claims Shine

Gold is listless in Friday trade, with a spot price of $1292.48 in the European session. A strong Unemployment Claims release on Thursday has helped the dollar hold its own against the precious metal. On Friday, the highlight on the schedule is JOLTS Jobs Claims. The key employment indicator has been moving higher, and the markets expect the upward trend to continue.

Gold prices slipped this week as concerns over the crisis in the Ukraine have eased. Russian President Vladimir Putin surprised observers when he urged pro-Russian separatists to postpone their referendum on independence. Putin claimed that Russia had withdrawn its forces from the Ukraine border, although there was no confirmation of this from NATO. The situation is likely to remain volatile, as elections in Ukraine scheduled for the end of May remain in jeopardy.

Federal Reserve Chair Janet Yellen testified before Congress on Wednesday and Thursday, and gave a cautious thumbs-up to the economic recovery. She said that the economy has improved, but pointed to two sore spots – the job market remains weak and inflation is below the Fed’s target of 2%. Yellen stated that she therefore expects that low interest rate levels will continue for a “considerable time”. Yellen has stated previously that slack remains in the economy, and the Fed is expected to proceed carefully with future trims to its QE scheme. Since December, the Fed has trimmed the asset-purchase program by almost half, cutting it to $45 billion each month.

 

XAU/USD for Friday, May 9, 2014

Forex Rate Graph 21/1/13

XAU/USD May 9 at 9:50 GMT

XAU/USD 1289.21 H: 1292.86 L: 1287.75

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1252 1260 1273 1300 1315 1330

 

  • XAU/USD is flat in Friday trade.
  • 1273 is providing support. This is followed by support at 1260.
  • 1300 is the first line of resistance. Next, there is resistance at 1315.
  • Current range: 1273 to 1300

Further levels in both directions:

  • Below: 1273, 1260, 1252 and 1241
  • Above: 1300, 1315, 1330, 1350 and 1388

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Friday, continuing the trend seen a day earlier. This is not consistent with the pair’s current lack of movement. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving higher against the US dollar.

Gold continues to drift on Friday, and is unchanged in the European session.

 

XAU/USD Fundamentals

  • 14:00 US JOLTS Job Openings. Estimate 4.21M.
  • 14:00 US Wholesale Inventories. Estimate 0.5%.
  • 22:00 US FOMC Member Narayana Kocherlakota Speaks.

*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.