Gold Slips to 14-Day Low as Jobless Claims Beats Estimate

Gold has posted considerable losses for a second straight day. In Thursday’s North American session, the spot price for an ounce of gold is $1274.06, down 0.75% on the day. In the US, unemployment claims edged lower to 238 thousand, below the estimate of 241 thousand. Personal Spending dropped to 0.3%, marking a 4-month low. Still, this beat the estimate of 0.2%. On Friday, the US releases Manufacturing PMI.

There was more good news for the US economy on Wednesday. Preliminary GDP for the third quarter posted a sharp 3.3%, as expected. This was higher than the initial estimate of 3.0% and marked the fastest growth rate since Q3 of 2014. This was particularly impressive, as the southern US was battered by major hurricanes. Although consumer consumption was softened in the third quarter, business spending improved. The rosy picture of the US economy was summarized by Fed Chair Yellen on Wednesday, who said  that the expansion was broad-based, across sectors of the economy.

Gold prices are inversely linked to interest rate hikes, and with the markets expecting rate hikes in December and January, traders should be prepared for some movement from gold. As well, there are major changes taking place at the Federal Reserve, as Jerome Powell is set to replace Janet Yellen as Fed chair in February. Powell didn’t make any waves at his confirmation hearing on Tuesday, although his comments on relaxing regulations for smaller banks did send global stock markets higher. Powell inherits a strong US economy, and this could mean several rate hikes in 2018, if the economy maintains its current pace. Still, inflation remains stubbornly low, and with Fed policymakers divided on whether to keep the 2 percent inflation target, the markets will be keeping close tabs on how Powell deals with inflation when he takes over the helm of the Fed.

XAU/USD Fundamentals

Thursday (November 30)

  • 8:30 US Unemployment Claims. Estimate 241K. Actual 238K
  • 8:30 US Core PCE Price Index. Estimate 0.2%. Actual 0.2%
  • 8:30 US Personal Spending. Estimate 0.2%. Actual 0.3%
  • 8:30 US Personal Income. Estimate 0.3%. Actual 0.4%
  • 9:45 US Chicago PMI. Estimate 62.2. Actual 63.9
  • 10:30 US Natural Gas Storage. Estimate -37B. Actual -33B
  • 12:30 US FOMC Member Randal Quarles Speaks
  • 13:00 US FOMC Member Robert Kaplan Speaks

Friday (December 1)

  • 10:00 US ISM Manufacturing PMI. Estimate 58.4

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, November 30, 2017

XAU/USD November 30 at 12:00 EST

Open: 1283.65 High: 1285.38 Low: 1272.34 Close: 1274.06

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1213 1240 1260 1285 1307 1337
  • XAU/USD was flat in the Asian session. The pair posted losses in European trade and continues to head lower 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 gains towards long positions in Thursday session. Currently, long positions have a majority (70%), 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.