Gold Slips After Strong Jobless Claims

Gold prices have stabilized on Friday, after sharp losses a day earlier. In the European session, the metal is trading at a spot price of $1264.03. On the release front, today’s major events are Advance GDP and UoM Consumer Sentiment.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. This vote of confidence pushed gold prices to lower levels. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

XAU/USD for Friday, January 30, 2015

XAU/USD January 30 at 11:45 GMT

XAU/USD 1264.03 H: 1266.18 L: 1257.33

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1215 1240 1255 1275 1300 1322

 

  • XAU/USD has shown limited movement in the Asian and the European sessions.
  • 1275 is a weak resistance line. 1300 is stronger.
  • 1255 is an immediate support level.
  • Current range: 1255 to 1275

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

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

XAU/USD Fundamentals

  • 13:30 US Advance GDP. Estimate 3.0%.
  • 13:30 US Advance GDP Price Index. Estimate 0.9%.
  • 13:30 US Employment Cost Index. Estimate 0.6%.
  • 14:45 US Chicago PMI. Estimate 57.7 points.
  • 15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.
  • 15:00 US Revised UoM Inflation Expectations.

*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.