XAU/USD – Gold Quiet at Start of Week, Housing Report Next

Gold has ticked higher on Monday, as the metal trades at $1339.24 in the North American session. There are no US releases on the schedule. On Tuesday, we’ll get a look at New Home Sales, a key indicator.

Later this week, central bank heads and other senior financial officials will meet for the annual tête-à-tête in Jackson Hole, Wyoming. The markets will be looking for hints from Federal Reserve chair Janet Yellen regarding the Fed’s monetary plans, particularly the timing a rate hike. FOMC members are expected to express their views ahead of the key meeting. Fed Vice Chairman Stanley Fischer took the opportunity and sounded upbeat about the US economy, saying that the Fed was close to its aims of a full labor market and the inflation target of 2 percent. The latter claim sounds a bit optimistic, as US inflation levels have consistently been closer to zero than the 2 percent level. It will be interesting to see if Janet Yellen follows suit and expresses satisfaction with current inflation levels.

Any market players who were hoping for some clarity from last week’s Federal Reserves minutes were likely none the wiser after combing through the minutes. The release, which provided the details of the July policy meeting, indicated that FOMC members are deeply divided on the timing of a rate hike – some want to raise levels soon, as the US labor market approaches full employment, while others expressed concern about making a move with inflation levels well below the target of 2%. Recent data is pointing in all directions, which explains why the Fed is divided over the timing of a rate hike. After a soft GDP report in late July, nonfarm payrolls was stellar. However, this was followed by weak retail sales and CPI numbers. The great rate debate needs to be resolved one way or another, as the Fed must set rates at its policy meeting next month. Policymakers will be fine-combing through upcoming economic releases, particularly employment and inflation numbers. The news remains bleak on the inflation front, as underscored by July’s consumer inflation reports. CPI posted a weak reading of 0.0%, its worst showing in five months. Core CPI dropped to 0.1%, shy of the estimate of 0.2%. As of now, a September hike is virtually off the table, while the odds of a December hike are about 40%.

XAU/USD Fundamentals

Monday (August 22)

  • There are no US releases on the schedule

Tuesday (August 23)

  • 10:00 US New Home Sales. Estimate 575K

*Key releases are highlighted in bold

*All release times are EDT

XAU/USD for Monday, August 22, 2016

XAU/USD August 22 at 13:45 EDT

Open: 1337.22 High: 1340.16 Low: 1331.65 Close: 1339.24

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1279 1307 1331 1361 1388 1416
  • XAU/USD has shown limited movement in the Monday session
  • There is resistance at 1361
  • 1331 is providing support
  • Current range: 1331 to 1361

Further levels in both directions:

  • Below: 1331, 1307 and 1279
  • Above: 1361, 1388, 1416 and 1447

OANDA’s Open Positions Ratio

XAU/USD ratio is showing long positions with a strong majority (65%), indicative of trader bias towards XAU/USD moving upwards. 

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.