Gold Remains High as PPI Misses Estimate

Gold has edged lower on Thursday, following gains in the Tuesday and Wednesday sessions. In North American trade, gold is trading at $1285.38 per ounce. On the release front, it was a busy day in the US which released three key indicators – PPI, Unemployment Claims and the UoM Consumer Sentiment. PPI missed its estimate, but unemployment claims and consumer confidence both beat expectations.

U.S. Jobless Claims Unexpectedly Fall as Labor Market Remains Firm

Gold Remains High Despite Inflation Drop

With geopolitical tensions weighing on jittery investors, gold prices have jumped 2.4 percent this week. On Wednesday, gold pushed above $1288, its highest level since November 10. Nervous investors have snapped up the base metal as tensions escalate over Syria and North Korea. The US bombed a Syrian military base last week, in response to a chemical attack by Syrian warplanes. Russia has strongly condemned the US move, chilling relations even further between the US and Russia. President Trump has also sent warships to the Korea peninsula, in a show of strength against North Korea, which continues to test ballistic missiles in defiance of the international community. As well, Donald Trump said in a newspaper interview on Wednesday that the value of the US dollar was too strong and that he was in favor of a low interest rate policy. Trump’s comment sent the dollar lower and pushed gold to higher levels.

On Monday, Federal Reserve Chair Janet Yellen said that with the economy close to full employment and 2 percent inflation, Fed policymakers were looking to reduce the support that the central bank was providing the economy. The minutes of the March meeting indicated that the Fed plans to trim the $4.5 trillion balance sheet, which has ballooned as a result of the huge asset-purchase program which started in 2008. The Fed plans to raise rates twice more in 2017, with the next rate expected in June. Yellen emphasized that the Fed’s policy stance is neutral, as interest rate increases will be gradual, given that the economy is growing at a moderate pace.

XAU/USD Fundamentals

Thursday (April 13)

• 8:30 US PPI. Estimate 0.0%. Actual -0.1%
• 8:30 US Unemployment Claims. Estimate 242K. Actual 232K
• 8:30 US Core PPI. Estimate 0.2%. Actual 0.0%
• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.1. Actual 98.0
• 10:00 US Preliminary UoM Inflation Expectations
• 10:30 US Natural Gas Storage. Estimate 5B

Friday (April 14)

• 8:30 US CPI. Estimate 0.0%
• 8:30 US Core CPI. Estimate 0.2%
• 8:30 US Core Retail Sales. Estimate 0.2%
• 8:30 US Retail Sales. Estimate 0.1%

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, April 13, 2017

XAU/USD April 13 at 12:15 EST

Open: 1287.19 High: 1288.64 Low: 1281.82 Close: 1285.38

XAU/USD Technical

• XAU/USD was flat in the Asian and European sessions. In North American trade, the pair has edged lower.
• 1260 is providing support
• 1285 was tested in resistance and remains under pressure
• Current range: 1260 to 1285

Further levels in both directions:

• Below: 1260, 1232, 1199 and 1174
• Above: 1285, 1307, 1337

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged in the Thursday session. Currently, long and short positions are almost evenly split, indicative of a lack of trader bias as to what direction XAU/USD will take next. 

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.