Gold Flat Ahead of Key US Data

Gold has stabilized on Tuesday, following strong losses a day earlier. In the European session, the metal is trading at a spot price of $1279.71. It’s a busy day in the US, with three key events on the calendar – Core Durable Goods Orders, CB Consumer Confidence and New Home Sales.

Greek voters went to the polls on Sunday and gave a sweeping mandate to the far-left Syriza party. Syriza ran on a platform of ending the crushing austerity scheme which Greeks have endured as part of the €240 billion bailout negotiated between and the EU, ECB and IMF. Predictably, the euro fell immediately after the election results, slipping to the 1.11 line. However, the common currency has recovered nicely, gaining about 100 points on Monday and continuing to move upwards on Tuesday.

Syriza’s win certainly throws a monkey wrench into the Greek bailout program, but the new Greek government is likely to negotiate a deal with Greece’s creditors. A Greek exit from the Eurozone may make for interesting headlines, but such a scenario is extremely unlikely. Indeed, Greek Prime Minister-elect Alexis Tsipras has promised to keep Greece in the Eurozone. Still, there remains plenty of uncertainty as to what will happen with the bailout plan, so traders can expect events in Athens to have a strong impact on the currency and commodity markets.

The Federal Reserve starts a two-day meeting on Tuesday and will release a policy statement on Wednesday. The Fed is expected to continue to counsel patience regarding an interest rate hike, and persistently weak inflation means the Fed can take its time before having to make a monetary move. The markets will be combing through the statement and any clues as to the timing of  rate hike could have a strong effect on gold prices.

XAU/USD for Tuesday, January 27, 2015

XAU/USD January 27 at 10:25 GMT

XAU/USD 1279.71 H: 1283.90 L: 1272.47

 

XAU/USD Technical

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

 

  • XAU/USD is showing limited movement on Tuesday. In the Asian session, the pair tested support at 1275.  The pair is unchanged in European trade.
  • On the downside, 1275 remains under pressure. Will the pair break through during the day? 1255 is next.
  • 1300 is an immediate resistance line.
  • 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 almost unchanged on Tuesday. This is consistent with the lack of movement displayed by the pair. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

  • 13:30 US Core Durable Goods Orders. Estimate 0.6%.
  • 13:30 US Durable Goods Orders. Estimate 0.6%.
  • 14:00 US S&P/CS Composite-20 HPI. Estimate 4.4%. 14:00 US
  • 14:45 US Flash Services PMI. Estimate 53.9 points.
  • 15:00 US CB Consumer Confidence. Estimate 95.3 points.
  • 15:00 US New Home Sales. Estimate 452K.
  • 15:00 US Richmond Manufacturing Index. Estimate 6 points.

*Key releases are highlighted in bold

*All release times are GMT

 

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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.