Gold Starts Week With A Whimper

Gold is showing little movement in the Monday session. In the North American session, the spot price for an ounce of gold is $1279.12, down 0.10% on the day. On the release front, there are no US events on the schedule.

The Federal Reserve is in the spotlight, as Janet Yellen’s term as head of the powerful central bank expires in February 2018. President Trump has said he will nominate a new Fed head shortly, and the front runners are economist John Taylor and Federal Reserve Governor Jerome Powell. Taylor advocates a rule in which rates which be as high as 3 percent, given current economic conditions. Powell is more closely aligned to Fed Chair Janet Yellen’s monetary stance which advocates an incremental increase in rates. With the two candidates representing sharply differing views on interest rate levels, Trump’s choice for the new Fed chair could have a significant effect on monetary policy and the strength of the US dollar.

Some rare good news for President Trump translated into losses for gold on Friday. On Thursday, the US Senate passed a $4 trillion budget measure. The bill barely squeaked through, as the vote was 51-49. Still, this is represents a crucial victory for President Trump, who was desperately in need of a legislative victory. The budget measure clears the way for an overhaul reform to the tax code, one of Trump’s key campaign promises. The Republicans are hopeful of passing a new tax code by the New Year, but that could prove overly optimistic, as the Democrats are expected to resist Trump’s tax proposal.

XAU/USD Fundamentals

Monday (October 23)

  • There are no US events

*All release times are GMT

*Key events are in bold

XAU/USD for Monday, October 23, 2017

XAU/USD October 23 at 12:15 EST

Open: 1280.36 High: 1280.72 Low: 1272.43 Close: 1279.12

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1213 1240 1260 1285 1307 1337
  • XAU/USD edged lower in the Asian and European sessions. The pair has recovered these losses in North American trade
  • 1260 is providing support
  • 1285 is the next resistance line
  • Current range: 1260 to 1285

Further levels in both directions:

  • Below: 1260, 1240 and 1213
  • Above: 1285, 1307, 1337 and 1367

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight movement towards short positions. Currently, long positions have a majority (64%), indicative of trader bias towards XAU/USD reversing directions and moving to higher ground.

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.