Gold Yawns After Fed, BoE Rate Decisions, Fed Chair Nomination Looms

Gold has ticked higher in the Thursday session. In North American trade, the spot price for an ounce of gold is $1275.93, up 0.16% on the day. On the release front, unemployment claims dropped to 229 thousand, beating the estimate of 235 thousand. The focus will be on employment numbers on Friday, as the US releases Average Hourly Earnings, Nonfarm Payrolls and the unemployment rate. We’ll also get a look at ISM Nonfarm Manufacturing PMI.

The markets weren’t expecting any fireworks from the Federal Reserve, as the November rate statement was expected to be little more than a run-up to the December rate decision. Fed policymakers signaled that a rate hike is very likely in December, and the Fed did not change the wording in the statement with regard to future rate hikes. The tone  of the statement was positive, as the Fed noted that the storms which battered the US had caused a decline in payrolls in September, but the storms were not likely to “materially alter the course of the national economy over the medium term.” After a excellent Advance GDP reading of 3.0%, the economy’s next test is nonfarm payrolls on Friday. In September, the indicator declined by 33 thousand, but the markets are counting on a strong rebound, with an estimate of 311 thousand for October. The markets are less bullish on wage growth, which is expected to slow to 0.2%, as inflation remains at low levels, despite strong economic growth.

The Fed remains in the spotlight, as President Trump is expected to announce later on Thursday who will succeed Janet Yellen as Fed chair when her term ends in February 2018. Federal Reserve Governor Jerome Powell is expected to get the nod from Trump. With Powell at the helm, we can expect more of the same from regarding monetary policy; namely, small incremental rate hikes, which has been the stance of the central bank since it began raising rates in December 2015.

XAU/USD Fundamentals

Thursday (November 2)

• 7:30 US Challenger Job Cuts. Actual -3.0%
• 8:30 US Unemployment Claims. Estimate 235K. Actual 229K
• 8:30 US FOMC Member Jerome Powell Speaks
• 8:30 US Preliminary Nonfarm Productivity. Estimate 2.5%. Actual 3.0%
• 8:30 US Preliminary Unit Labor Costs. Estimate 0.5%. Actual 0.5%
• 10:30 US Natural Gas Storage. Estimate 63B. Actual 65B
• 12:20 US FOMC Member William Dudley Speaks

Friday (November 3)

• 8:30 US Average Hourly Earnings. Estimate 0.2%
• 8:30 US Nonfarm Employment Change. Estimate 311K
• 8:30 US Unemployment Rate. Estimate 4.2%
• 10:00 US ISM Non-Manufacturing PMI. Estimate 58.5

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, November 2, 2017

XAU/USD November 2 at 12:40 EST

Open: 1274.45 High: 1284.20 Low: 1273.20 Close: 1275.93

XAU/USD Technical

• XAU/USD edged higher in the Asian session but retracted in the European session. The pair is showing limited movement 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 almost unchanged on Thursday. Currently, long positions have a majority (70%), indicative of trader bias towards XAU/USD continuing to move 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.