Gold Steady Ahead of ECB Rate Decision, Unemployment Claims

Gold is stable on Thursday, with a spot price of at $1272.14 per ounce. In the Eurozone, the ECB meets later in the day and is expected to maintain its minimum bid rate at 0.15%. In the US, there are four key releases on the schedule – ADP Nonfarm Payrolls, Trade Balance, Unemployment Claims and the ISM Non-Manufacturing PMI.

After months of fighting in eastern Ukraine between government forces and pro-Russian fighters, Ukrainian President Petro Poroshenko on Wednesday announced a cease-fire in eastern Ukraine. Whether the latest attempt at a truce will last, however, is doubtful. Russia has denied assisting the rebels, but both Ukraine and NATO have said that Russian forces are involved in the fighting. The crisis has severely strained relations between the West and Russia, and if the situation deteriorates, gold prices could move higher.

US numbers continue to impress the markets. On Tuesday, ISM Manufacturing PMI impressed the markets, climbing to 59.0 points, its best showing since April 2011. The index easily beat the estimate of 57.0 points. The strong showing follows an unexpectedly strong GDP, which hit 4.2%. With the US economy moving forward at a fast clip, the US dollar has responded with strong gains against gold. Employment data will be in the spotlight for the remainder of the week, with the release of ADP Nonfarm Payrolls and Unemployment Claims on Thursday, followed by the official Nonfarm Payrolls and the unemployment rate on Friday.

 

XAU/USD for Thursday, September 4, 2014

XAU/USD September 4 at 10:10 GMT

XAU/USD 1272.14 H: 1273.46 L: 1267.90

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1210 1240 1252 1275 1300 1315

 

  • XAU/USD has showed little movement in the Asian and European sessions.
  • 1252 is an immediate support line. This is followed by support at 1240.
  • 1275 is under pressure and could break during the day. The round number of 1300 is next.
  • Current range: 1252 to 1275.

Further levels in both directions:

  • Below: 1252, 1240, 1210 and 1186
  • Above: 1275, 1300, 1315 and 1331

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Thursday. This is not consistent with the pair’s current movement, as gold has made small gains. The ratio continues to have a substantial majority of long positions, indicative of trader bias towards gold breaking out of its current range trading and moving to higher levels.

 

XAU/USD Fundamentals

  • 11:30 US Challenger Job Cuts. Actual -20.7%.
  • 11:45 ECB Minimum Bid Rate. Estimate 0.15%.
  • 12:15 US ADP Non-Farm Employment Change. Estimate 218K.
  • 12:30 ECB Press Conference.
  • 12:30 US Trade Balance. Estimate -42.5B.
  • 12:30 US Unemployment Claims. Estimate 298K.
  • 12:30 US Revised Nonfarm Productivity. Estimate 2.5%.
  • 12:30 US Revised Unit Labor Costs. Estimate 0.6%.
  • 13:45 US Final Services PMI. Estimate 58.5 points.
  • 14:00 US ISM Nonfarm Manufacturing PMI. Estimate 57.3 points.
  • 14:30 US Natural Gas Storage. Estimate 72B.
  • 15:00 US Crude Oil Inventories. Estimate -0.9M.
  • 16:30 US FOMC Member Loretta Mester Speaks.
  • 23:00 US FOMC Member Jerome Powell 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.

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.