Gold Steady As Markets Eye Nonfarm Payrolls

Gold prices are listless in Friday trading. In the European session, the gold spot price is at $1286. In economic releases, the markets are keeping a close eye on the highlight of the week, US Nonfarm Payrolls. The US will release the Unemployment Rate at the same time. On Thursday, Unemployment Claims was a disappointment, as the indicator jumped to a nine-week high. There was better news from ISM Manufacturing PMI, which beat the forecast.

Nonfarm Payrolls is a critical release, and traders should be prepared for some market movement after its publication later on Friday. The indicator has been improving throughout 2014, and the markets are expecting the upward trend to continue, with a rosy estimate of 216 thousand. Earlier in the week, ADP Nonfarm Payrolls looked sharp, jumping to 220 thousand, marking a four-month high. This easily beat the estimate of 203 thousand. Will the official Nonfarm Payrolls follow suit on Friday? A strong showing from the key indicator could prop up the dollar and push down gold, which has been struggling of late.

As expected, the Federal Reserve trimmed its QE program by $10 billion on Wednesday. This marks the fourth cut since December, reducing the asset purchase scheme to $45 billion/month. The tapers are no longer creating headlines as they did just a few months ago, and the dollar didn’t get any lift against its major rivals. What interested the markets more was the Fed statement that interest rates would remain low for a “considerable time” after QE ends. The markets expect QE to wind up before the end of the year, so we could see a rate hike in early 2015, depending of course, on the strength of the US economy and the job market.

 

XAU/USD for Friday, May 2, 2014

Forex Rate Graph 21/1/13

XAU/USD May 2 at 10:50 GMT

XAU/USD 1286.56 H: 1287.00 L: 1281.62

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1241 1260 1273 1300 1315 1330

 

  • XAU/USD is showing little movement in Friday trade.
  • 1273 continues to provide support to the pair. This is followed by a support level at 1260, which has held firm since early February.
  • 1300 is the next line of resistance. 1315 is next.
  • Current range: 1273 to 1300

Further levels in both directions:

  • Below: 1273, 1260, 1252 and 1241
  • Above: 1300, 1315, 1330, 1350 and 1388

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions in Friday trade, continuing the trend seen since Wednesday. This is consistent with the pair’s current movement, as gold has edged higher. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving upwards.

Gold is steady on Friday, with all eyes on the Nonfarm Employment Change later in the day. XAU/USD has edged higher in the European session.

 

XAU/USD Fundamentals

  • 12:30 US Non-Farm Employment Change. Estimate 216 thousand.
  • 12:30 US Unemployment Rate. Estimate 6.6%.
  • 12:30 US Average Hourly Earnings. Estimate 0.2%.
  • 14:00 US Factory Orders. Estimate 1.5%.

*Key releases are highlighted in bold

*All release times are GMT

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.