Gold Dips Before Recovering as Retail Sales, CPI Beat Estimates

Gold is almost unchanged on Wednesday, after losing ground before recovering. In North American trade, the spot price for one ounce is $1231.58. In economic news, CPI gained 0.6% and Core CPI rose 0.3%, as both consumer inflation indexes beat their estimates. Retail sales reports also beat expectations, with Core Retail Sales climbing 0.8% and Retail Sales gaining 0.4%. As well, Fed chair Janet Yellen will continue her testimony about the semiannual Monetary Policy Report before Congress. On Thursday, the US releases three key events – Building Permits, Philly Fed Manufacturing Index and unemployment claims.

Janet Yellen is in the spotlight this week. The Fed chair testified before a Senate committee on Tuesday, and was surprisingly upfront about monetary policy, stating that she expected that the Fed would raise rates in the near future. Yellen stated that “waiting too long to remove accommodation would be unwise”, referring to the re-hot labor market and expectations that inflation will soon reach the Fed’s target of 2 percent. Will the Fed opt to raise rates in March or in June? The markets will be looking for clues on the timing of a move, as Yellen continues her testimony on Thursday before the House Financial Services Committee. Either way, further tightening from the Fed should translate into gains for the US dollar.

XAU/USD Fundamentals

Wednesday (February 15)

  • 13:30 US CPI. Estimate 0.3%. Actual 0.6%
  • 13:30 US Core CPI. Estimate 0.2%. Actual 0.3%
  • 13:30 US Core Retail Sales. Estimate 0.4%. Actual 0.8%
  • 13:30 US Retail  Sales. Estimate 0.1%. Actual 0.4%
  • 13:30 US Empire State Manufacturing Index. Estimate 7.2. Actual 18.7
  • 14:15 US Capacity Utilization Rate. Estimate 75.6%. Actual 75.3%
  • 14:15 US Industrial Production. Estimate 0.1%. Actual -0.3%
  • 15:00 US Fed Chair Janet Yellen Speech
  • 15:00 US Business Inventories. Estimate 0.5%. Actual 0.4%
  • 15:00 US NAHB Housing Market Index. Estimate 68. Actual 65
  • 15:30 US Crude Oil Inventories. Estimate 3.7M. Actual 9.5M
  • 17:45 US FOMC Member Patrick Harker Speech
  • 21:00 US TIC Long-Term Purchases. Estimate 191.1B

Thursday (February 16)

  • 13:30 US Building Permits. Estimate 1.23M
  • 13:30 US Philly Fed Manufacturing Index. Estimate 18.5 points
  • 13:30 US Unemployment Claims. Estimate 243K

*All release times are EST

*Key events are in bold

XAU/USD for Wednesday, February 15, 2017

XAU/USD February 15 at 13:20 EST

Open: 1228.47 High: 1233.06 Low: 1216.56 Close: 1231.58

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1146 1174 1199 1232 1260 1285
  • XAU/USD was flat in the Asian session. The pair edged lower in European trade but has reversed directions and posted sharp gains in North American trade
  • 1199 is providing support
  • 1232 is fluid as a resistance line and could see further action in the Wednesday session
  • Current range: 1199 to 1232

Further levels in both directions:

  • Below: 1199, 1174 and 1146
  • Above: 1232, 1260, 1285 and 1307

OANDA’s Open Positions Ratio

On Wednesday, XAU/USD ratio is showing a majority (64%) in long positions, indicative of trader bias towards XAU/USD continuing to move 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.