Gold Stable Ahead of Key US Data

Gold has edged lower on Tuesday, as the spot price stands at $1306.09 per ounce in the European session. On the release front, it’s a busy day in the US, highlighted by Core CPI and Existing Home Sales, the first major events of the week from the US. The markets are bracing for another weak outing from Core CPI, while Existing Home Sales is  expected to improve sharply.

International trouble spots continue to grab the headlines, as nervous investors keep an eye on events Ukraine and the Middle East. Last week’s downing of a Malaysian Airlines jet, apparently by pro-Russian separatists, has seriously frayed relations between Europe and the US with Russia, which have already been strained since the latter annexed Crimea. Fighting continues between the separatists and Ukrainian forces in Eastern Ukraine. The Europeans are threatening stronger sanctions against Russia, and escalating tensions within Europe could affect the markets. In the Middle East, the fighting in Gaza between Hamas and Israel has intensified, as Israel presses on with a land offensive. Meanwhile, the international community is intensifying efforts to try to get the two sides to agree to a cease fire.

On Friday, US Consumer Sentiment remained steady at 81.3 points, but this was well below the estimate of 83.5 points. A day earlier, Unemployment Claims dropped slightly to 302 thousand, beating the estimate of 310 thousand. This figure marks a seven-week low, as the economy continues to churn out impressive employment data. With Janet Yellen telling Congress that a rate hike could be pushed forward if inflation and employment data exceeds expectations, improving employment data will put more pressure on the Fed to raise rates.

 

XAU/USD for Tuesday, July 22, 2014

XAU/USD July 22 at 11:35 GMT

XAU/USD 1306.09 H: 1313.25 L: 1304.65

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1252 1275 1300 1315 1331 1354

 

  • XAU/USD edged lower late in the Asian session. The pair is almost unchanged in European trading.
  • 1315 is the next resistance line. 1331 follows.
  • 1300 has switched to a support level as the pair has lost ground. 1275 is stronger.
  • Current range: 1300 to 1315.

Further levels in both directions:

  • Below: 1300, 1275, 1252 and 1240.
  • Above: 1315, 1331, 1354 and 1375.

 

OANDA’s Open Positions Ratio

XAU/USD ratio has posted gains in short positions on Tuesday, reversing the direction seen a day earlier. This is consistent with the movement of the pair, as gold is down slightly. The ratio has a majority of long positions, indicative of trader bias towards gold moving upwards.

 

XAU/USD Fundamentals

  • 12:30 US Core CPI. Estimate 0.2%.
  • 12:30 US CPI. Estimate 0.3%.
  • 13:00 US HPI. Estimate 0.4%.
  • 14:00 US Existing Home Sales. Estimate 4.98M.
  • 14:00 US Richmond Manufacturing Index. Estimate 5 points.

*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.