Gold Prices Stable Ahead of US Manufacturing, Confidence Numbers

Gold is listless on Tuesday continuing the lack of movement which started the week. In the European session, the spot price per ounce stands at $1228.44. On the release front, there are two key events on the schedule – Core Durable Goods Orders and CB Consumer Confidence. If either of these indicators surprises the markets, we could see some stronger movement from the pair in the North American session.

In the US, the Federal Reserve wraps up a two-day meeting on Wednesday with the release of a policy statement. The Fed is expected to wind up QE, and if policymakers delay this move, the dollar will likely take a hit against its major rivals. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. Traders should treat this release as a market-mover which could have a significant impact on gold prices.

On Sunday, the ECB released the results of its stress tests of European banks. The exercise marked a comprehensive and rigorous review of the health of 130 European banks. No German or French banks failed the test, but the third largest Italian lender, Banca Monte Paschi, posted a capital shortfall and will have to explain to the ECB how its plans to eliminate the shortfall. The ECB is trying to restore confidence in the European banking sector and encourage more borrowing and spending on the part of consumers and businesses.

 

XAU/USD for Tuesday, October 28, 2014

XAU/USD October 28 at 9:30 GMT

XAU/USD 1228.44 H: 1232.21 L: 1222.53

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1180 1200 1215 1240 1252 1275

 

  • Gold has been stable in the Asian and European sessions.
  • 1240 remains an immediate resistance line. 1252 is stronger.
  • 1215 is the next support level.
  • Current range: 1215 to 1240.

Further levels in both directions:

  • Below: 1215, 1200, 1156 and 1111
  • Above: 1240, 1252, 1275, 1300 and 1322

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Tuesday. This is consistent with the pair, which has posted small gains on the day. The ratio has a majority of long positions, indicative of trader sentiment in favor of gold breaking out and moving higher.

 

XAU/USD Fundamentals

  • 12:30 US Core Durable Goods Orders. Estimate 0.5%.
  • 12:30 US Durable Goods Orders. Estimate 0.4%.
  • 13:00 S&P/CS Composite-20 HPI. Estimate 5.7%.
  • 14:00 US CB Consumer Confidence. Estimate 87.4 points.
  • 14:00 US Richmond Manufacturing Index. Estimate 11 points.

*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.