Gold in Holding Pattern Ahead of ECB Statement, US Payrolls

Gold prices have edged lower on Thursday, as the spot price stands at $1321.10 per ounce late the European session. It’s a busy day on the release front, and we could see some movement from XAU/USD. In the Eurozone, the ECB will announce its benchmark interest rate, followed by a press conference hosted by ECB head Mario Draghi. Over in the US, employment data is in the spotlight, with the releases of Nonfarm Payrolls, the Unemployment Rate and Unemployment Claims. As well, we’ll get a look at US Trade Balance.

Will the ECB take any dramatic action at its policy meeting later on Thursday? Most analysts think not, with the ECB expected to hold rates at the record low of 0.15% and maintain current monetary policy. At the June meeting, the ECB took unprecedented steps to combat low growth and inflation, including negative deposit rates. These measures were intended to boost inflation and growth levels, but that hasn’t occurred, at least not yet. This was reaffirmed with the release of Eurozone Retail Sales on Thursday, the primary gauge of consumer spending. The indicator dipped to 0.0%, shy of the estimate of 0.3%.

In the US, ADP Nonfarm Payrolls was outstanding, soaring to 281 thousand, up from 179 thousand a month earlier. This crushed the estimate of 207 thousand. Will the official Nonfarm Payrolls follow suit? The markets are expecting a reading of 214 thousand, slightly below the May reading. The Unemployment Rate and Unemployment Claims are also expected to show little change. If there are any surprises from these key indicators, traders can expect some movement from EUR/USD during the day.

 

XAU/USD for Thursday, July 3, 2014

XAU/USD July 3 at 11:05 GMT

XAU/USD 1321.10 H: 1326.68 L: 1319.82

 

XAU/USD Technical

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

 

  • Gold edged lower in the Asian session and is almost unchanged in European trading.
  • 1315 is an immediate support line. The round number of 1300 is stronger.
  • 1331 is the next resistance line.
  • 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 unchanged on Thursday. This is reflected in the pair’s movement, as gold has edged lower. The ratio has a slight majority of long positions, pointing to trader bias towards gold moving to higher levels against the US dollar.

 

XAU/USD Fundamentals

  • 11:45 Eurozone Minimum Bid Rate. Estimate 0.15%.
  • 12:30 ECB Press Conference.
  • 12:30 US Nonfarm Employment Change. Estimate 214K.
  • 12:30 US Unemployment Claims. Estimate 314K.
  • 12:30 US Unemployment Rate. Estimate 6.3%.
  • 12:30 US Trade Balance. Estimate -45.1B.
  • 12:30 US Average Hourly Earnings. Estimate 0.2%.
  • 13:45 US Final Services PMI. Estimate 61.1 points.
  • 14:00 US ISM Non-Manufacturing PMI. Estimate 56.2 points.
  • 14:30 US Natural Gas Storage. Estimate 100B.

*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.