Gold Prices Flat After Mixed US Data

Gold prices are flat on Monday, following gains posted on Friday. In the European session, the spot price stands at $1293.41 an ounce. On Friday, On Friday, US Nonfarm Payrolls came in at 209 thousand, well short of the estimate. There was better news from ISM Manufacturing PMI, which improved in July. On Monday, the sole release out of the US is the Loan Officer Survey.

US employment numbers failed to impress last week. On Friday, Nonfarm Payrolls took a tumble, slipping to 209 thousand, compared to 288 thousand a month earlier. This was well below the estimate of 231 thousand and marked a four-month low. Earlier in the week, Unemployment Claims rose to 302 thousand, very close to the estimate of 303 thousand. There was positive news from the manufacturing sector, as US ISM Manufacturing PMI rose to 57.1 points, its best showing since November. As well, UoM Consumer Sentiment continues to look strong, coming in at 81.8 points. The index has not been below the 80-point level in 2014, pointing to strong consumer confidence.

Last week, the Federal Reserve released a policy statement, with the Fed sounding somewhat dovish in tone. Policymakers acknowledged lower unemployment levels, but noted that “there remains significant underutilization of labor resources” in the economy. The Fed statement reinforces the view that the US central bank is in no rush to raise interest rates after the termination of QE, which is expected in October. As well, the Fed said that inflation levels have moved somewhat closer to the Fed’s target of 2.0%. The Fed has remained vague as to when it will raise interest rates, but if the economy continues moving in the right direction, a rate increase is likely before mid-2105.

 

XAU/USD for Monday, August 4, 2014

XAU/USD August 4 at 10:15 GMT

XAU/USD 1293.41 H: 1295.43 L: 1291.47

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1240 1252 1275 1300 1315 1331

 

  • XAU/USD has been steady in the Asian and European sessions.
  • 1300 remains an immediate resistance line. 1315 is stronger.
  • 1275 is providing support. 1252 is next.
  • Current range: 1275 to 1300.

Further levels in both directions:

  • Below: 1275, 1252, 1240 and 1208
  • Above: 1300, 1315, 1331 and 1345

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Monday. This is consistent with the movement of the pair, as gold has edged lower. The ratio currently has a strong majority of long positions, indicative of trader bias towards gold prices moving higher.

 

XAU/USD Fundamentals

  • Tentative – US Loan Officer Survey.

*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.