Gold Calm Ahead of US Retail Sales

Gold is steady on Wednesday, trading at the spot price of $1234.68 per ounce in the European session. On the release front, today’s key events are Core Retail Sales and Retail Sales. The markets are expecting weaker readings compared to last month’s readings.

US job numbers have looked sharp, and the trend continued on Tuesday, as JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be under the market microscope as the Fed mulls when to raise interest rates.

Will the ailing euro continue to point south? The New Year hasn’t brought much cheer to the common currency, which has recorded sharp losses so far in 2015. EUR/USD is currently at its lowest level since December 2005. With the Eurozone showing little growth or inflation, efforts by the ECB, including cutting rates to almost zero haven’t had the desired effect, and a sluggish Eurozone economy has meant a softer euro. The ECB may be forced to play its trump card, quantitative easing. This would involve the purchase of large amounts of Eurozone bonds, and would likely push the euro down even further. The markets are on a “QE watch”, waiting to see what happens at the ECB’s next policy meeting next Thursday.

XAU/USD for Wednesday, January 14, 2015

XAU/USD January 14 at 10:25 GMT

XAU/USD 1229.37 H: 1234.68 L: 1225.17

 

XAU/USD Technical

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

 

  • XAU/USD showed little movement in the Asian session. The pair touched a high of 1234.68, putting pressure on resistance at 1240. The pair is unchanged in the European session.
  • 1215 is an immediate support level.
  • 1240 is a weak resistance line. 1255 is stronger.
  • 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 pointing to gains in long positions on Wednesday. This is consistent with the pair’s movement, as gold continues to post gains. The ratio remains close to a split between long and short positions, indicating a lack of trader bias as to what direction the pair will take next.

XAU/USD Fundamentals

  • 13:30 US Core Retail Sales. Estimate 0.1%.
  • 13:30 US Retail Sales. Estimate 0.2%.
  • 13:30 US Import Prices. Estimate -2.7%.
  • 15:00 US Business Inventories. Estimate 0.2%.
  • 15:30 US Crude Oil Inventories. Estimate 1.2M.
  • 18:01 US 30-year Bond Auction.
  • 19:00 US Beige Book.

*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.