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Gold Flat Ahead of ECB Announcement

Gold is quiet in Thursday trade, after sharp losses a day earlier. In the European session, the spot price stands at $1291.96. Federal Reserve chair Janet Yellen will continues her congressional tour, as she speaks before the Senate Budget Committee later in the day. On the release front, today’s highlight is Unemployment Claims. The markets are expecting a strong improvement after last week’s poor showing.

Gold prices slipped on Wednesday as concerns over the crisis in the Ukraine has eased. Russian President Vladimir Putin surprised observers when he urged pro-Russian separatists to postpone their referendum on independence. Putin claimed that Russia had withdrawn its forces from the Ukraine border, although there was no confirmation of this from NATO. The situation is likely to remain volatile, as elections in Ukraine scheduled for the end of May remain in jeopardy.

Federal Reserve Chair Janet Yellen testified before Congress’ Economic Joint Committee on Wednesday, and gave a cautious thumbs-up to the economic recovery. She said that the economy has improved, but pointed to two sore spots – the job market remains weak and inflation is below the Fed’s target of 2%. Yellen stated that she therefore expects that low interest rate levels will continue for a “considerable time”. Yellen has stated previously that slack remains in the economy, and the Fed is expected to proceed carefully with future trims to its QE scheme. Since December, the Fed has trimmed the asset-purchase program by almost half, cutting it to $45 billion each month.


XAU/USD for Thursday, May 8, 2014

Forex Rate Graph 21/1/13

XAU/USD May 8 at 10:30 GMT

XAU/USD 1292.07 H: 1292.48 L: 1287.44


XAU/USD Technical

S3 S2 S1 R1 R2 R3
1252 1260 1273 1300 1315 1330


Further levels in both directions:


OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Thursday. This is consistent with the pair’s current movement, as gold has posted small gains. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving higher against the US dollar.

Gold is almost unchanged in the European session. We could see some movement from the pair during the day, with US Unemployment Claims still to follow.


XAU/USD Fundamentals

*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 [4]

Currency Analyst at Market Pulse [5]
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.
Kenny Fisher

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