Gold Remains Listless Ahead of Unemployment Claims

Gold prices are not showing much movement on Thursday, as the spot price stands at $1245.21 per ounce in the European session.  The markets are keeping a close eye on Nonfarm Payrolls, which will be released later on Friday. On Thursday, the ECB cut interest rates, although the reductions were not as deep as expected.

Mario Draghi and his colleagues finally pressed the trigger on Thursday, as the ECB lowered the benchmark interest rate for the first time since November 2013. The rate was lowered to 0.15%, less than expected by the markets, which had anticipated a cut to 0.10%. As well, the marginal lending rate was cut to 0.40% from 0.75% and the deposit facility rate to -0.10% from 0.0%. This is the first time that the ECB has cut deposit rates below 0%, the aim being to encourage banks to lend more funds to businesses rather than have to pay to park funds overnight with the central bank. Draghi opted not to implement a quantitative easing program, but did hint that further action was on the way if necessary.

In the US, the spotlight is on employment releases. On Wednesday, ADP Nonfarm Payrolls slipped to 179 thousand, well off the estimate of 217 thousand. Unemployment Claims were not sharp, rising to 312 thousand, up from 300 thousand in the previous reading. The estimate stood at 309 thousand. Nonfarm Payrolls will be released on later on Friday, and a weak reading could weigh on the US dollar. We’ll also get a look at the Unemployment Rate, with little change expected.

 

XAU/USD for Friday, June 6, 2014

XAU/USD June 6 at 9:00 GMT

XAU/USD 1254.87 H: 1256.74 L: 1252.80

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1182 1200 1230 1250 1260 1275

 

  • Gold is steady on Thursday.
  • 1230 is providing support. Next there is support at the round number of 1200.
  • 1250 is the next resistance line. 1260 is stronger.
  • Current range: 1230 to 1250.

Further levels in both directions:

  • Below: 1230, 1200, 1182 and 1158
  • Above: 1250, 1260, 1275, 1300, 1315

 

OANDA’s Open Positions Ratio

XAU/USD ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold breaking out and gaining ground against the US dollar.

Gold continues to show very little movement. XAU/USD is unchanged in the European session.

 

XAU/USD Fundamentals

  • 11:30 US Challenger Job Cuts.
  • 12:30 US Unemployment Claims. Estimate 309 thousand.
  • 14:30 US Natural Gas Storage. Estimate 116B.
  • 17:30 US FOMC Member Narayana Kocherlakota Speaks.

*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.