Gold Steady Ahead of US Jobs Data

Gold is stable on Thursday, continuing a week in which the metal has shown little movement. The spot price stands at $1310.62 per ounce in the European session. On the release front, today’s highlight is Unemployment Claims. The markets are expecting the indicator to rise back above the 300 thousand level, with an estimate of 307 thousand.

Gold prices remain above the key $1300 level, as the metal has benefited from the crises in Ukraine and the Middle East. Fighting continues between Ukrainian forces and pro-Russian separatists, and the UN says that over 2000 people have died in the past two weeks. 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 ceasefire between Israel and Hamas has been renewed for five days, with negotiations over a long-term agreement expected to continue in Cairo.

In the US, retail sales data disappointed on Wednesday. Retail Sales dropped to a flat 0.0% last month, its weakest showing since January. The estimate stood at 0.2%. Core Retail Sales wasn’t much better, posting a gain of 0.1%, down from 0.4% a month earlier. This was well short of the estimate of 0.4%. Retail sales are the primary gauge of consumer spending, and July’s weak numbers points to a slow start to the third quarter. Although unemployment levels have dropped, this has not translated into stronger spending by the US consumer. We’ll get a look at Unemployment Claims later in the day. The markets are expecting a weaker reading than the week before, with the estimate at 307 thousand.

 

XAU/USD for Thursday, August 14, 2014

XAU/USD August 14 at 10:10 GMT

XAU/USD 1317.42 H: 1311.31 L: 1310.62

 

XAU/USD Technical

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

 

  • XAU/USD was flat in the Asian session. The pair posted gains early in European trading but then retracted.
  • 1315 remains 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 pointing to gains in short positions on Thursday, continuing the trend we saw a day earlier. This is consistent with the movement of the pair, as gold has posted very small losses. The ratio continues to have a substantial majority of long positions, indicative of trader bias towards gold posting gains.

 

XAU/USD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 307K.
  • 12:30 US Import Prices. Estimate -0.2%.
  • 14:30 US Natural Gas Storage. Estimate 81B.
  • 17:01 US 30-year Bond Auction.

*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.