Gold Steady as Markets Eye US Retail Sales, CPI

Gold prices is steady on Friday, as the base metal trades just under $1070 per ounce in the European session. We could see some movement during the day, as the US releases a host of key releases, led by Retail Sales and CPI.

Gold prices remain depressed, as the US dollar has played kingmaker in recent weeks. Gold has lost about 8 percent of its value in November, as commodity prices continue to head south. The main catalyst for gold’s misfortunes has been the projected rate hike by the Federal Reserve next week, as higher interest rates make yield-bearing assets more attractive. Geopolitical crises often see investors scurry to gold, but the terror attacks in France and fighting in Syria and Iraq have failed to stem gold’s steep descent.

The markets have become somewhat spoiled with strong job numbers out of the US, so weak employment readings this week came as a rude surprise. On Thursday, Unemployment Claims shot up to 282 thousand, its highest level in two months. The markets had expected a reading of 266 thousand. Still, the four-week average of unemployment claims remains at low levels. Earlier this week, JOLT Job Openings The important employment indicator slipped to 5.38 million, sharply lower than the previous month’s reading of 5.53 million. This soft figure was way off the estimate of 5.59 million. Will this weak numbers deter the Federal Reserve from  proceeding with an expected rate hike at the policy meeting on December 16? There are no guarantees as to what the Fed has in mind for the markets, but the likelihood remains very high that a rate hike will occur, to the point that we’re likely to see strong volatility in the markets if the Fed doesn’t press the rate trigger next week.

Friday (Dec. 11)

  • 13:30 US Core Retail Sales. Estimate 0.3%
  • 13:30 US PPI. Estimate 0.0%
  • 13:30 US Retail Sales Estimate 0.2%
  • 13:30 US Core PPI. Estimate 0.2%
  • 15:00 US Preliminary UoM Consumer Sentiment. Estimate 92.3 points
  • 15:00 US Business Inventories. Estimate 0.1%
  • 15:00 US Preliminary UoM Inflation Expectations

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Friday, December 11, 2015

Forex Rate Graph 21/1/13

XAU/USD December 11 at 9:20 GMT

XAU/USD 1069.92 H: 1073 L: 1065

XAU/USD Technical

S3 S2 S1 R1 R2 R3
980 1024 1043 1080 1098 1134
  • XAU/USD posted losses in the Asian session but recovered. The pair has been uneventful in European trade.
  •  1080 is providing resistance
  • 1043 is the next support level
  • 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

In the XAU/USD ratio, long positions continue to command a solid majority (71%). 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.