Gold Prices Flat Ahead of ADP Nonfarm Payrolls

Gold is listless on Wednesday, as the spot price stands at $1327.61 per ounce in the European session. On the release front, today’s highlight is the ADP Nonfarm Payrolls, which should be treated as a market-mover. As well, Federal Reserve chair Janet Yellen will address the IMF in Washington.

Last week’s US GDP release for Q1 was a disaster, as the economy contracted by almost 3%. However, the markets remained calm, and the US dollar escaped without much damage against most of its major rivals. More recent releases have been better, notably consumer confidence and housing data. Pending Home Sales jumped 6.1%, crushing the estimate of 1.4%. This was the strongest gain since May 2013. This reading followed New Home Sales and Existing Home Sales, which both beat their estimates. The markets are keeping a close eye on ADP Nonfarm Payrolls, which is published prior to the official NFP release. The markets are expecting the indicator to improve to 207 thousand, compared to a gain of just 179 thousand a month earlier. An unexpected reading could see gold break out of its current holding pattern.

With the ECB holding a policy meeting on Thursday, Eurozone employment numbers are being carefully scrutinized. There was good news on Tuesday, as the Eurozone Unemployment Rate dipped to 11.6%, its lowest level in almost two years. This edged below the estimate of 11.7%. The strong reading could contribute to the ECB deciding to maintain current policy and not introduce a more accommodative monetary stance. At the July meeting, the ECB took unprecedented steps to combat low growth and inflation, including negative deposit rates.

 

XAU/USD for Wednesday, July 2, 2014

XAU/USD July 2 at 10:50 GMT

XAU/USD 1327.61 H: 1324.32 L: 1327.23

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1275 1300 1315 1331 1354 1375

 

  • Gold has been steady throughout the European and Asian sessions.
  • 1315 continues to provide support.
  • 1331 is an immediate resistance line and could face pressure during the day. 1354 is stronger.
  • Current range: 1315 to 1331.

Further levels in both directions:

  • Below: 1315, 1300, 1275 and 1260
  • Above: 1331, 1354, 1375 and 1388

 

OANDA’s Open Positions Ratio

XAU/USD is pointing to gains in long positions on Wednesday, reversing the trend we had seen since the start of the week. This is reflected in the pair’s movement, as gold has posted very small gains. The ratio has a slight majority of  long positions, pointing to trader bias towards gold moving to higher levels.

 

XAU/USD Fundamentals

  • 11:30 US Challenger Job Cuts.
  • 12:15 US ADP Nonfarm Employment Change. Estimate 207K.
  • 14:00 US Factory Orders. Estimate -0.4%.
  • 14:30 US Crude Oil Inventories. Estimate -2.2M.
  • 15:00 US Fed 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.