Gold Steady Ahead of US Employment Numbers

Gold continues to trade above the $1300 since a surge late last week. On Tuesday, the spot price is at $1311.53 per ounce in the European session. On the release front, today’s highlight is JOLTS Jobs Openings.

Gold crossed above the $1300 level last week, climbing as high as $1322 on Friday. The precious metal has benefited as the crises in Ukraine and Iraq have worsened. The US has accused Russia of massing troops on its border with Ukraine, and tensions are high as the EU has slapped stronger sanctions on Russia, while Moscow has retaliated by banning many food imports from the West. In Iraq, Islamic State militants, who continue to make gains in Iraq, have attacked and displaced thousands of ethnic Kurds, which has resulted in a growing humanitarian crisis. US President Barak Obama has authorized air strikes against the militants in order to protect the Kurds and safeguard US interests. The situation in Iraq is volatile and could quickly destabilize even further. In Gaza, a 72-hour ceasefire is holding as negotiations between Israel and Hamas are being conducted in Cairo.

In the US, employment indicators are under the market microscope, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate hike is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a rate move. We’ll get a look at JOLTS Jobs Openings later on Tuesday. The indicator has been on an upswing and exceeded the estimate in the past two releases. Another rise is expected in the July release, with the estimate standing at 4.74 million.

 

XAU/USD for Tuesday, August 12, 2014

XAU/USD August 12 at 12:05 GMT

XAU/USD 1311.53 H: 1313.61 L: 1305.72

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1252 1275 1300 1315 1331 1345

 

  • XAU/USD was stable in the Asian session and has lost ground in the European session.
  • 1315 is an immediate resistance line. 1331 is stronger.
  • 1300 is providing support. 1275 is next.
  • Current range: 1300 to 1315.

Further levels in both directions:

  • Below: 1300, 1275, 1252 and 1240
  • Above: 1315, 1331, 1345 and 1361

 

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged on Tuesday. This is not consistent with the movement of the pair, as gold has posted small gains. The ratio continues to have a substantial majority of long positions, indicative of trader bias towards gold posting gains.

 

XAU/USD Fundamentals

  • 11:30 US NFIB Small Business Index. Estimate 96.3 points.
  • 14:00 US JOLTS Job Openings. Estimate 4.74M.
  • 18:00 US Federal Budget Balance. Estimate -98.2B.

*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.