Gold Slips to 3-Month Lows as Markets Eye Unemployment Claims

Gold has lost ground on Wednesday, as this week’s downward spin continues. In the European session, the spot price stands at $1240.85 per ounce, its lowest level since early June. Today’s highlight is Unemployment Claims. The estimate stands at 306 thousand, slightly higher than last week’s reading of 302 thousand.

US numbers continue to point to a deepening recovery, but the labor market is showing some troubling signs. JOLTS Job Openings was unchanged in August at 4.67 million, short of the estimate of 4.72 million. On Friday, the eagerly-anticipated Nonfarm Employment Change crashed to 142 thousand, its lowest gain since January. This surprised the markets, which had expected a gain of 226 thousand. Unemployment Claims fell short of the estimate last week and another weak reading on Thursday could temper the dollar’s impressive rally.

After months of fighting in eastern Ukraine between government forces and pro-Russian fighters, a ceasefire which began on Friday appears to be holding up, although some sporadic fighting has been reported. Russia has denied assisting the rebels, but both Ukraine and NATO have said that Russian forces have aided the separatists and attacked government positions. The crisis has severely strained relations between the West and Russia, and trade between Europe and Russia has suffered as a result. European countries have already implemented sanctions against Russia and have threatened further sanctions if the latest ceasefire does not hold.

XAU/USD for Thursday, September 11, 2014

XAU/USD September 11 at 9:20 GMT

XAU/USD 1240.85 H: 1250.16 L: 1238.23

XAU/USD Technical

• XAU/USD was steady in the Asian session. The pair has edged lower in European trading, as the dollar puts pressure on gold.
• On the downside, 1252 is under strong pressure and could break during the day. This is followed by support at 1240.
• 1275 has some breathing room as a resistance line.
• Current range: 1252 to 1275.

Further levels in both directions:

• Below: 1240, 1210, 1186 and 1156
• Above: 1252, 1275, 1300, 1315 and 1331

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Thursday, reversing the direction seen a day earlier. This is not consistent with the movement we’re seeing from the pair, as gold continues to lose ground.. The ratio continues to have a substantial majority of long positions, indicative of trader bias towards gold reversing its downward movement against the dollar.

XAU/USD Fundamentals

• 12:30 US Unemployment Claims. Estimate 306K.
• 14:30 US Natural Gas Storage. Estimate 84B.
• 17:01 US 30-year Bond Auction.
• 18:00 US Federal Budget Balance. Estimate -132B.

*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.