XAU/USD – Gold Flat Ahead of US Consumer Inflation

Gold is calm on Wednesday, as the spot price stands at $1245.94 per ounce in the European session. In the US, today’s highlights are Core CPI and CPI. The markets are keeping expectations low for the September readings.

Although US economic numbers have been strong overall, the lack of inflation remains a serious concern. Last week, PPI slipped to -0.1%, its first decline in four months. We’ll get a look at consumer inflation numbers on Wednesday, with the release of Core CPI and CPI. Soft figures would be an indication of weak consumer demand, which could hamper the US recovery.

Despite the efforts of the ECB, inflation levels in the Eurozone remain anemic, as German PPI came in at a flat 0.0%, shy of the estimate of 0.1%. The indicator has not produced a gain since December, as Germany continues to struggle with a lack of inflation. Eurozone Current Account, which is closely linked to currency demand, posted a surplus of EUR 18.9 billion, little changed from the previous release of EUR 18.7 billion. This reading disappointed the markets, as the estimate stood at EUR 21.3 billion.

 

XAU/USD for Wednesday, October 22, 2014

XAU/USD October 22 at 10:45 GMT

XAU/USD 1245.94 H: 1249.37 L: 1244.94

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1186 1215 1240 1252 1275 1300

 

  • Gold has shown little movement in the Asian and European sessions, as the pair continues to trade in a narrow range.
  • On the upside, 1252 remains a weak line. 1275 is stronger.
  • 1240 is an immediate support level. 1215 is next.
  • Current range: 1240 to 1252.

Further levels in both directions:

  • Below: 1240, 1215, 1186, 1156 and 1136
  • Above: 1252, 1275, 1300 and 1322

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Wednesday. This is consistent with the pair’s movement, as gold has posted small losses. The ratio has a majority of long positions, indicative of trader sentiment in favor of gold breaking out and gaining ground.

 

XAU/USD Fundamentals

  • 12:30 US CPI. Estimate 0.0%.
  • 12:30 US Core CPI. Estimate 0.2%.
  • 14:30 US Crude Oil Inventories. Estimate 2.8M.

*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.