Gold prices are flat in Tuesday trading, as the markets return to action after the Easter holiday. In the European session, the spot price is $1291.69. On the release front, today’s key event is Existing Home Sales. The indicator has been on a downward spiral, and this is expected to continue in the March release. Will the indicator surprise the markets and rebound higher?
US releases ended the week on a high note, as employment and manufacturing numbers were strong. The all-important Unemployment Claims was up slightly to 304 thousand, but had no trouble beating the estimate of 316 thousand. With the Federal Reserve planning another trim to its QE program at the end of the month and speculation rising about a possible interest rate increase next year, every employment release is under the market microscope. Meanwhile, the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.
Comments by Federal Reserve chair Janet Yellen last week have weighed on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.
XAU/USD for Tuesday, April 22, 2014
XAU/USD April 22 at 11:50 GMT
XAU/USD 1291.41 H: 1292.56 L: 1285.97
- XAU/USD is steady in Tuesday trade. The pair dipped to a low of $1285.96 during the Asian session but has bounced back above the $1290 line.
- 1273 is providing strong support. This line has remained intact since mid-February.
- 1300, a key level, is the next resistance line. This is followed by resistance at 1315.
- Current range: 1273 to 1300
Further levels in both directions:
- Below: 1273, 1260, 1241 and 1215
- Above: 1300, 1315, 1355, 1388 and 1403
OANDA’s Open Positions Ratio
XAU/USD ratio is pointing to gains in long positions in Tuesday trade. This is consistent with the pair’s current movement, as gold prices have edged higher. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving higher against the dollar.
Gold is steady in Tuesday trade, but the precious metal remains under pressure. XAU/USD has edged higher in the European session.
- 13:00 US HPI. Estimate 0.6%.
- 14:00 US Existing Home Sales. Estimate 4.57M.
- 14:00 US Richmond Manufacturing Index. Estimate 0 points.
*Key releases are highlighted in bold
*All release times are GMT