XAU/USD – Gold Takes Holiday Break After Dismal Week

Gold is almost unchanged on Monday. In the North American session, the metal is trading at a spot price of $1259.68 per ounce. There are no US release on the schedule, as markets are closed for the Columbus Day holiday.

It was a dismal week for gold prices, which has slipped 4.5 percent. The metal dropped slipped to low of $1241 on Friday, its lowest level since early June. The sharp drop in gold prices has mirrored the recent spike in oil prices. A sharp jobless claims report sent gold lower on Thursday, and the metal lost ground on Friday but then recovered, as the US posted mixed employment numbers.

The US released eagerly-awaited employment numbers for September on Friday, and the data was mixed. Nonfarm payrolls, one of the most closely watched indicators, rose slightly to 156 thousand. Although this was well short of the forecast of 171 thousand, the markets do not appear overly concerned, as other employment indicators were steady. Average Hourly Wages edged up to 0.2%, matching the forecast. The unemployment edged up to 5.0%, just above the forecast of 4.9%. As well, the labor force participation rate ticked higher. Unemployment claims sparkled last week, dropping to just 249 thousand, beating the estimate of 255 thousand. Unemployment claims have come in below the forecast for 10 straight weeks, pointing to a tight labor market. Jobless filings have been below 300,000 for 83 straight weeks, marking the longest streak since 1970. Overall, September employment numbers were decent and the likelihood of  December rate has actually risen slightly since Friday, from 63 percent to 66 percent.

XAU/USD Fundamentals

Monday (October 10)

• There are no US releases on the schedule

XAU/USD for Friday, October 10, 2016

XAU/USD October 10 at 12:15 EDT

Open: 1259.84 High: 1264.95 Low: 1256.62 Close: 1259.68

XAU/USD Technical

• XAU/USD has been flat for most of the Monday session
• 1245 is providing support
• There is resistance at 1279
• Current range: 1245 to 1279

Further levels in both directions:

• Below: 1245, 1223 and 1199
• Above: 1279, 1307 and 1331

OANDA’s Open Positions Ratio

XAU/USD ratio is showing long positions with a substantial majority (74%). This is indicative of trader bias towards XAU/USD breaking out and moving upwards.

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