Gold Stable Near $1300

Gold prices remained fairly steady after the ECB’s quantitative easing announcement on Thursday, and the metal remains calm in Friday trade. In the European session, the spot price stands at $1295.31 per ounce. On the release front, today’s highlight is US Existing Home Sales. The markets are expecting a jump in the December report, with an estimate of 5.08 million.

The markets had expected the ECB to pull the QE  trigger on Thursday, but Mario Draghi has often underwhelmed in his monetary moves, so a QE package worth €1 trillion sent the euro reeling against the US dollar. The QE scheme will see the ECB purchase €60 billion each month, commencing in March and scheduled to last until late 2016. The ECB has been under increasing pressure to combat deflation in the Eurozone, as underscored by a December inflation reading of -0.2%. In remarks on Thursday, Draghi acknowledged that ECB efforts to fight deflation had been insufficient. Thursday’s dramatic move demonstrates a strong determination by the ECB to “take the bull by its horns” in the battle to bolster inflation and kick-start the ailing Eurozone economy.

XAU/USD for Friday, January 23, 2015

XAU/USD January 23 at 11:30 GMT

XAU/USD 1295.31 H: 1301.87 L: 1292.60

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1240 1255 1275 1300 1322 1345

 

  • XAU/USD has shown limited movement in the Asian and European sessions.
  • 1275 is an immediate support line.
  • On the upside, 1300 is under strong pressure. Will the pair break through during the day? 1322 is stronger.
  • Current range: 1275 to 1300

Further levels in both directions:

  • Below: 1275, 1255, 1240, 1215 and 1200
  • Above: 1300, 1322, 1345 and 1375

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Friday. This is consistent with the pair’s movement, as gold has posted slight losses. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

  • 14:45 US Flash Manufacturing PMI. Estimate 54.1 points.
  • 15:00 US Existing Home Sales. Estimate 5.08M.
  • 15:00 US CB Leading Index. Estimate 0.5%.

*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.