Gold Pushes Above $1300 Ahead Of US Key Releases

Gold has steadied in Thursday trading, after pushing back above the $1300 line a day earlier. In the European session, the spot price is at $1305.12. On the release front, it’s a busy schedule in the US, with three major events – Core CPI, Unemployment Claims and the Philly Fed Manufacturing Index. As well, Federal Reserve chair Janet Yellen will speak at an event in Washington.

The crisis in Ukraine remains in the headlines, as pro-Russian separatists held referendums on Sunday and declared self-rule after the vote. The Ukraine government denounced the referendums as illegal and European countries have threatened further sanctions against Russia. However, sanctions have been limited so far, as Europe is dependent on Russia for energy supplies. Elections scheduled in Ukraine for May 25th remain in jeopardy and there are mounting fears that the country could slide into civil war, as fighting continues between government and separatist forces. In an ominous development, Russian Foreign Minister Sergei Lavrov warned that Ukraine was “as close to civil war as you can get”.

Low inflation levels have also been a persistent problem in the US, and Fed chair Yellen highlighted this issue when speaking before Congress last week. Inflation levels are nowhere near the Fed’s target of 2.0%, and weak inflation is a sign of an underperforming US economy. There was good news on Wednesday as PPI, a key inflation indicator, edged higher in April, coming in at 0.6%. This easily beat the estimate of 0.2%. Core PPI also beat the estimate, posting a gain of 0.5%. We’ll see if Core CPI can follow suit and beat the estimate later on Thursday.

 

XAU/USD for Thursday, May 15, 2014

Forex Rate Graph 21/1/13

XAU/USD May 15 at 11:40 GMT

XAU/USD 1304.91 H: 1307.14 L: 1301.41

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1273 1300 1315 1330 1350

 

  • XAU/USD is showing little movement in Thursday trade.
  • 1300 is providing weak support. There is stronger support at 1273.
  • 1315 is the next line of resistance.
  • Current range: 1300 to 1315.

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Thursday, continuing the trend we’ve seen for most of the week. This is not consistent with the pair’s movement, as the pair is showing little activity. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold gaining ground against the US dollar.

Gold is back above the $1300 level. XAU/USD has edged higher in the European session.

 

XAU/USD Fundamentals

  • 12:30 US Core CPI. Estimate 0.1%.
  • 12:30 US Unemployment Claims. Estimate 321K.
  • 12:30 US CPI. Estimate 0.3%.
  • 12:30 US Empire State Manufacturing Index. Estimate 5.5 points.
  • 13:00 US TIC Long-Term Purchases. Estimate 32.3B.
  • 13:15 US Capacity Utilization Rate. Estimate 79.2%.
  • 13:15 US Industrial Production. Estimate 0.4%.
  • 14:00 US Philly Fed Manufacturing Index. Estimate 13.9 points.
  • 14:00 US Mortgage Delinquencies.
  • 14:00 US NAHB Housing Market Index. Estimate 49 points.
  • 14:30 US Natural Gas Storage. Estimate 99B.
  • 23:00 Federal Reserve Chair Janet Yellen 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.