Gold Pauses After Sharp Losses Kick Off Week

Gold is unchanged in the Tuesday session, after starting the week with considerable losses. In the North American session, the spot price for an ounce of gold is $1327.47, up 0.07%. On the release front, JOLTS  Job Openings improved to 6.17 million, easily beating the forecast of 5.96 million. On Wednesday, the US will publish PPI, which is expected to improve to 0.3%.

As one of the most popular safe-haven assets, gold prices have moved higher in recent weeks, as tensions have ratcheted upwards over North Korea’s nuclear program. The country has launched missiles over Japan and tested a hydrogen bomb, which has send nervous investors flocking to gold as risk appetite as waned. The markets were prepared for more fireworks over the weekend, as North Korea celebrated its independence day, raising fears that Pyongyang would use the occasion to flex some muscle and test a nuclear bomb or missile. Last year, the country celebrated its anniversary by exploding its fifth nuclear test. With the crisis appearing to ease, stock markets are up and gold prices are down this week, as investors have regained their appetite for risk.

The US economy has generally looked positive in the second quarter of 2017. Preliminary GDP came in at a sizzling 3.0%, and the labor market remains close to capacity. Still, the Achilles heel of the economy remains stubbornly low inflation levels. Wage pressure has been limited, despite the fact that many businesses cannot fill job openings. Weak inflation has hampered the Fed’s plans to raise interest rates a third time this year, and the odds of a December hike have dipped to just 31%, as the markets are increasingly doubtful that the Fed will make a move before next year. Will the inflation picture improve? We could see better numbers this week for August inflation – PPI is expected to improve to 0.3% on Tuesday, and the same gain is forecast for CPI on Wednesday. Both estimates are higher than the July readings.

XAU/USD Fundamentals

Tuesday (September 12)

• 6:00 US NFIB Small Business Index. Estimate 104.8. Actual 105.3
• 10:00 US JOLTS Job Openings. Estimate 5.96M. Actual 6.17M
• 13:01 US 10-y Bond Auction

Upcoming Key Events

Wednesday (September 13)

• 8:30 US PPI. Estimate 0.3%

*All release times are GMT

*Key events are in bold

XAU/USD for Tuesday, September 12, 2017

XAU/USD September 12 at 12:40 EST

Open: 1349.06 High: 1357.62 Low: 1347.50 Close: 1353.40

XAU/USD Technical

• XAU/USD has posted limited movement in the Tuesday session
• 1337 is providing support
• 1367 is the next resistance line
• Current range: 1337 to 1367

Further levels in both directions:

• Below: 1337, 1307, 1285 and 1260
• Above: 1367, 1392 and 1416

OANDA’s Open Positions Ratio

In the Tuesday session ,XAU/USD is evenly split between short and long positions. This is indicative of a lack of trader bias as to what direction XAU/USD will take next. 

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