Gold Climbs as Fed Remains Mum on Rates

Gold prices have risen on Thursday to their highest levels since March, as the spot price stands at $1343.70 per ounce in the European session. The metal gained steam as the Federal Reserve minutes did not provide any clarity as to when the Fed might raise interest rates. In economic news, US Unemployment Claims is today’s key event.

The Federal Reserve minutes did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE will require several more tapers by the Fed, but that shouldn’t pose a problem, given the solid employment data the economy has been churning out.

US employment numbers continue to look sharp. On Tuesday, JOLTS Job Openings jumped to 4.64 million, easily beating the estimate of 4.53 million. This follows excellent figures from Nonfarm Payrolls and Unemployment Rate. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

XAU/USD for Thursday, July 10, 2014

XAU/USD July 10 at 12:30 GMT

XAU/USD 1343.70 H: 1344.84 L: 1327.08

XAU/USD Technical

• XAU/USD was uneventful in the Asian session and made strong gains in European trading.
• 1354 is the next resistance line. 1375 follows.
• 1331 has reverted to a support line as gold has moved higher.
• Current range: 1331 to 1354.

Further levels in both directions:

• Below: 1331, 1315, 1300 and 1275
• Above: 1354, 1375, 1388 and 1423

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged on Thursday. This is not reflected in the pair’s movement, as gold has posted strong gains. The ratio continues to show an even split between long and short positions, indicative of a lack of trader bias as to where gold is headed next.

XAU/USD Fundamentals

• 12:30 US Unemployment Claims. Estimate 316K.
• 14:00 US Wholesale Inventories. Estimate 0.6%.
• 14:30 US Natural Gas Storage. Estimate 92B.
• 17:01 US 30-year Bond Auction.
• 20:30 US FOMC Member Stanley Fischer 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.