Gold Trading Above 1215 Level

Gold has posted slight losses on Monday, trading at the spot price of $1219.73 per ounce in the European session. Gold posted strong gains to end the week, as the metal trades comfortably above the key line of $1200. On the release front, the only data release out of the US is the Labor Conditions Market Index. As well, FOMC member Dennis Lockhart will deliver a speech in Atlanta.

US releases wrapped up the week in fine fashion, as employment data shined. Nonfarm Employment Change, one of the most important indicators, posted a gain of 252 thousand, easily beating the estimate of 241 thousand. The unemployment rate fell to 5.6%, edging below the forecast of 5.7%. Meanwhile, Average Earnings dropped 0.2%, its first decline since July 2013. A lack of wage pressure means that the Fed may be able to postpone a rate hike until the second half of 2015.

The Federal Reserve released the minutes of its previous meeting on Wednesday, with no surprises for the markets. There had been plenty of speculation that the insertion of the word “patience” in the previous policy statement signaled a more aggressive monetary stance. However, the minutes stated that Fed members remained of the view that Fed policy had not changed, and that a rate hike was unlikely before April. Although economic growth continues to improve, inflation remains at very low levels, which means that the economy is in no danger of overheating, so there is no immediate need for a rate increase.

XAU/USD for Monday, January 12, 2015

XAU/USD January 12 at 11:55 GMT

XAU/USD 1219.73 H: 1231.18 L: 1217.93

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1175 1200 1215 1240 1255 1275

 

  • XAU/USD posted gains in the Asian session. The pair has reversed directions in European trade and given up the earlier gains.
  • 1215 is a weak support line. The round number of 1200 is next.
  • On the upside, 1240 an immediate resistance line.
  • Current range: 1215 to 1240

Further levels in both directions:

  • Below: 1215, 1200, 1175, 1156 and 1130
  • Above: 1240, 1255, 1275 and 1300

 

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged on Monday. This is not consistent with the pair’s movement, as gold has posted slight losses. The ratio remains a split between open and short positions, indicating a lack of trader bias as to what direction the pair will take next.

XAU/USD Fundamentals

  • 15:00 US Labor Market Conditions Index.
  • 17:40 US FOMC Member Dennis Lockhart Speaks.

*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.