Gold Steady at $1200

Gold has been posting gains since Friday, and the metal is trading at the key level of $1200 on Wednesday. On the release front, In the US, we’ll get a look at important housing data, with the release of Building Permits and Housing Starts. The markets are expecting a slight improvement from both indicators. As well, the Federal Reserve will release the minutes of its October policy meeting.

ECB head Mario Draghi and his colleagues are under strong pressure to “do something” to kick-start the weak Eurozone economy. Deep interest rate cuts haven’t had much effect, so the ECB has purchased covered bonds and asset-backed securities. So far, these securities have been from the private sector, and the ECB could decide to expand these purchases to government bonds, known has quantitative easing. However, there is resistance to quantitative easing from national central banks, such as the powerful Bundesbank. Speaking before a European parliamentary committee on Monday, Draghi said that further stimulus measures could include quantitative easing.

US inflation numbers have been persistently weak, but the news was good on Tuesday, as PPI beat expectations with a modest gain of 0.2%. This marked a 4-month high and beat the estimate of -0.1%. Core PPI, which excludes the most volatile items counted in PPI, posted a gain of 0.4%, above the forecast of 0.2%. This was the index’s best showing since April. We’ll get a look at consumer inflation data on Thursday.

XAU/USD for Wednesday, November 19, 2014

XAU/USD November 19 at 11:35 GMT

XAU/USD 1200.65 H: 1202.40 L: 1191.55

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1156 1175 1200 1215 1240 1255

 

  • XAU/USD has been uneventful in the Asian and European sessions, trading close to the key level of 1200.
  • On the downside, the round number of 1200 remains fluid. 1175 is stronger.
  • 1215 is an immediate resistance line. 1240 follows.
  • Current range: 1200 to 1215.

Further levels in both directions:

  • Below: 1200, 1175, 1156, 1130 and 1111
  • Above: 1215, 1240, 1255 and 1275

 

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged on Wednesday. This is consistent with the pair’s movement, as gold is showing little movement. The ratio has a majority of long positions, indicative of trader bias in favor of gold moving to higher levels.

 

XAU/USD Fundamentals

  • 13:30 US Building Permits. Estimate 1.04M
  • 13:30 US Housing Starts. Estimate 1.03M.
  • 15:30 US Crude Oil Inventories. Estimate -0.7M.
  • 19:00 US FOMC Meeting Minutes.

*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.