Gold Improves, US Unemployment Claims Meet Expectations

Gold has improved on Thursday, as the metal trades at a spot price of $1060.43 in the European session. In the US, Unemployment Claims almost matched the estimate, rising to 268 thousand. Today’s other key event is ISM Non-Manufacturing PMI. As well, Federal Reserve Chair Janet Yellen testifies before the Joint Economic Committee.

Gold has shown some volatility this week and briefly dropped below $1050 in Thursday’s Asian session. The base metal has struggled and remains close to levels not seen since February 2010. November was a brutal month for the metal, which gave up about seven percent of its value. With the markets eyeing a rate hike in December, and the US dollar continuing to pound its rivals, investors have had little reason to turn to gold. A rate hike is bearish for gold, since gold becomes less competitive with yield-bearing assets. So, the growing likelihood that we’ll see a rate hike later in December continues to weigh on gold.

In the US, this week’s employment numbers kicked off in style, with a strong surge from ADP Nonfarm Payrolls. The key indicator climbed to 217 thousand, easily beating the estimate of 191 thousand. This marked a sharp rebound from the previous release of 182 thousand. On Thursday, Unemployment Claims came in just a shade below the forecast, rising to 268 thousand, compared to last week’s reading of 260 thousand. The employment event parade concludes on Friday, with the official Nonfarm Payrolls report. The markets are braced for a strong downturn, with an estimate of 201 thousand. With the markets abuzz over continuing speculation about a rate hike later in the month, these employment releases will be under the market microscope and could result in volatility on the currency markets.

XAU/USD Fundamentals

Thursday (Dec. 3)

  • 12:30 US Challenger Job Cuts. Actual -13.9%
  • 13:30 US Unemployment Claims. Estimate 269K. Actual 268K
  • 14:45 US Final Services PMI. Estimate 56.5 points
  • 15:00 US Fed Chair Janet Yellen Testifies
  • 15:00 US ISM Non-Manufacturing PMI. Estimate 58.1 points
  • 15:00 US Factory Orders. Estimate 1.2%
  • 15:30 US Natural Gas Storage. Estimate -22B
  • 18:10 US FOMC Member Stanley Fischer Speaks

Upcoming Key Events

Friday (Dec. 4)

  • 13:30 US Average Hourly Earnings. Estimate 0.2%
  • 13:30 US Nonfarm Employment Change. Estimate 201K
  • 13:30 US Unemployment Rate. Estimate 5.0%

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Thursday, December 3, 2015

Forex Rate Graph 21/1/13

XAU/USD December 3 at 13:15 GMT

XAU/USD 1067.30 H: 1070 L: 1067

XAU/USD Technical

S3 S2 S1 R1 R2 R3
980 1024 1043 1080 1098 1134
  • XAU/USD has showed little movement in the Asian and European sessions.
  • 1080 is the first line of resistance.
  • 1043 is providing support.
  • Current range: 1043 to 1080

Further levels in both directions:

  • Below: 1043, 1024 and 980
  • Above: 1080, 1098, 1134 and 1151

OANDA’s Open Positions Ratio

XAU/USD ratio is showing some movement towards long positions, which maintain a solid majority (74%). This is indicative of strong trader bias towards gold prices moving to higher levels.

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.