Gold Steady as US Consumer Confidence Dips

Gold prices has moved back above the $1200 level, as the metal is trading at a spot price of $1209.00 on Wednesday. In the US, Federal Reserve head Janet Yellen continues a second day of testimony in Congress. The US will release New Home Sales, with the markets expecting a softer reading in the January report.

Janet Yellen testified before a Senate committee on Tuesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing growth should lead to the unemployment rate continuing to fall. The Fed Chair will resume testimony before the House Financial Services Committee on Wednesday, but it’s not likely that Yellen will say anything which will shake up the markets.

On the Eurozone front, Greece’s list of economic reforms was accepted by the country’s creditors on Tuesday, paving the way for an extension of the bailout for another four months. The Greek government has promised to continue with privatization plans and to meet budget targets. Still, the extension is a stop-gap measure and with sharp differences remaining between Greece and its creditors, the bailout crisis is far from over.

XAU/USD for Wednesday, February 25, 2015

XAU/USD February 25 at 11:30 GMT

XAU/USD 1209.00 H: 1211.94 L: 1204.11

XAU/USD Technical

• XAU/USD has shown limited movement in the Asian and European sessions.
• 1200 remains a busy line and is currently a weak support level. 1175 is next.
• 1215 is a weak resistance line. 1240 is next.
• Current range: 1200 to 1215

Further levels in both directions:

• Below: 1200, 1175, 1154, 1131 and 1111
• Above: 1215, 1240, 1255 and 1275

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Wednesday, continuing the trend we saw a day earlier. This is not consistent with the pair’s movement, as gold has posted small gains. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

• 15:00 US Federal Reserve Janet Yellen testifies.
• 15:00 US New Home Sales. Estimate 471K.
• 15:30 US Crude Oil Inventories. Estimate 3.6M.

*Key releases are highlighted in bold

*All release times are GMT

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