Gold has posted gains in the Monday session. In North American trade, the spot price for one ounce is trading at $1229.38, its highest level since November 17. On the release front, there are no major US events to start off the week. On Tuesday, the US will release JOLTS Job Openings, with the indicator expected to rise to 5.56 million.
The US released key employment numbers on Friday, to mixed reviews. Nonfarm payrolls jumped to 227 thousand, well above the estimate of 170 thousand. However, wage growth disappointed, as Average Hourly Earnings slipped to 0.1%, short of the forecast of 0.3%. The markets were mixed employment numbers have increased doubts about a Fed rate hike, as the odds of a move by June have fallen to 50 percent, compared to 70 percent just a few weeks ago. There’s no arguing that the US economy is performing well, but there is a sense of uneasiness in the markets as Donald Trump continues to create controversy and dissent both at home and abroad. Trump has picked a fight with Mexico and his travel ban on Moslems from seven countries has created a strong backlash. Moreover, the lack of an economic policy is a major source of concern and the the post-election euphoria which sent the markets higher appears to have dissipated. The Federal Reserve also in the dark about Trump’s plans, and is expected to adopt a wait-and-see attitude in the coming months.
Donald Trump’s promise of “America First” is setting off alarm bells with close trading partners of the US, such as Canada and Japan. Trump has declared that he intends to revisit the NAFTA trade agreement, which has been an anchor of the US-Canada trade relationship for over 20 years. Trump didn’t mince words last week when describing NAFTA, saying that “NAFTA has been a catastrophe for our country. It’s been a catastrophe for our workers and our jobs and our companies.” Although Trump is unlikely to unravel the agreement, his protectionist stance could lead to tensions or even a trade war with Canada. Last week, Trump took aim at Japan, stating that Japanese monetary policy was dragging down the value of the yen and creating an unfair trade advantage for Japan.
Monday (February 6)
- 15:00 US Labor Market Conditions Index. Actual 1.3
- 18:30 US FOMC Member Patrick Harker Speech
- Tentative – US Loan Officer Survey
Tuesday (February 7)
- 10:00 US JOLTS Jobs Openings. Estimate 5.56M
*All release times are EST
*Key events are in bold
XAU/USD for Monday, February 6, 2017
XAU/USD February 6 at 13:50 EST
Open: 1220.90 High: 1230.20 Low: 1220.08 Close: 1229.38
- XAU/USD was flat in the Asian session. The pair posted gains in the European session and is steady in North American session
- 1199 is providing support
- 1232 is a weak resistance line
- Current range: 1199 to 1232
Further levels in both directions:
- Below: 1199, 1174, 1146 and 1130
- Above: 1232, 1260 and 1285
OANDA’s Open Positions Ratio
In the Monday session, XAU/USD ratio is showing long positions with a strong majority (67%), indicative of trader bias towards XAU/USD continuing to climb 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.