Gold prices are steady on Wednesday, as the spot price stands at $1237.25 per ounce. The metal has posted modest gains this week, after slipping about 3% against the strong US dollar. Taking a look at today’s events, the US will release CPI numbers later in the day. As well, the Federal Reserve releases its policy statement, followed by a press conference with Fed chair Janet Yellen.
US inflation indicators remain soft, as underscored by weak manufacturing inflation numbers in August. PPI, a key event, dipped to just 0.0%, a 3-month low. The estimate stood at 0.1%. Core PPI slipped to 0.1%, down from 0.2% a month earlier. Meanwhile, the Federal Reserve will be in the spotlight, with the Fed expected to trim its QE scheme by another $10 billion. At one time, the Fed was pumping up to $85 billion/month, but a strong recovery has allowed the Fed to steadily taper its asset purchases, and the QE program is expected to wind up in October. Investors are taking a cautious approach to the Fed statement, as there is speculation that the Fed could use hawkish language and send gold to lower levels.
Scottish voters will cast their ballots in a referendum on independence on Thursday. The most recent polls are pointing to a close vote, with many voters still undecided. If voters do choose to secede from the UK, this would create plenty of questions and uncertainty, including what currency an independent Scotland would use and how the national debt would be divided. A vote to split up the UK could lead to turmoil in the markets and weigh heavily on the markets. Traders should treat the referendum as a market-mover, as a close vote could have negative repercussions for the struggling pound.
XAU/USD for Wednesday, September 17, 2014
XAU/USD September 17 at 11:10 GMT
XAU/USD 1237.25 H: 1239.07 L: 1234.41
- XAU/USD is showing little movement as the pair trades close to resistance at 1240.
- 1210 is an immediate support line. 1186 is stronger.
- On the upside, 1240 is under strong pressure and could break during the day. 1252 is next.
- Current range: 1210 to 1240.
Further levels in both directions:
- Below: 1210, 1186, 1156 and 1111
- Above: 1240, 1252, 1275, 1300, and 1315
OANDA’s Open Positions Ratio
XAU/USD ratio is pointing to gains on Wednesday. This is consistent with the movement we’re seeing from the pair, as gold has posted small gains. The ratio has a substantial majority of long positions, indicative of trader bias towards gold continuing to gain ground against the dollar.
- 12:30 US CPI. Estimate 0.1%.
- 12:30 US Core CPI. Estimate 0.2%.
- 12:30 US Current Account. Estimate -114B.
- 14:00 US NAHB Housing Market Index. Estimate 56 points.
- 14:30 US Crude Oil Inventories. Estimate -0.9M.
- 18:00 US FOMC Economic Projections.
- 18:00 US FOMC Statement.
- 18:00 US Federal Funds Rate. Estimate <0.25%.
- 18:30 US FOMC Press Conference.
*Key releases are highlighted in bold
*All release times are GMT