Gold Slightly Higher Ahead of Fed Minutes

Gold prices have risen modestly on Wednesday, as the spot price stands at $1327.37 per ounce early in the North American session. Today’s highlight is the release of the FOMC minutes.

The Federal Reserve returns to the spotlight on Wednesday, as the FOMC releases the minutes of its June policy meeting. The markets would love some clarity as to when the Fed is looking to raise interest rates. Any hints in this regard could send the currency markets scrambling. Based on updated Fed forecasts for inflation and unemployment, it’s safe to say that the Fed is cautiously optimistic about the pace of the US recovery.

US employment numbers continue to look sharp. On Tuesday, JOLTS Job Openings jumped to 4.64 million, easily beating the estimate of 4.53 million. This follows excellent figures from Nonfarm Payrolls and Unemployment Rate. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

XAU/USD for Wednesday, July 9, 2014

XAU/USD July 9 at 13:40 GMT

XAU/USD 1324.99 H: 1327.37 L: 1317.70

XAU/USD Technical

• XAU/USD edged higher in both the Asian and European sessions. The pair is stable early in North American trading.
• 1315 is providing support. The round number of 1300 is stronger.
• 1331 is the next resistance line.
• Current range: 1315 to 1331.

Further levels in both directions:

• Below: 1315, 1300, 1275 and 1260
• Above: 1331, 1354, 1375 and 1388

OANDA’s Open Positions Ratio

XAU/USD is pointing to gains in short positions on Wednesday, continuing the trend we’ve seen all week. This is not reflected in the pair’s movement, as gold has posted small gains. The ratio is evenly split between long and short positions, indicative of a lack of trader bias as to where gold is headed next.

XAU/USD Fundamentals

• 14:30 US Crude Oil Inventories. Estimate -1.7M.
• 17:01 US 10-year Bond Auction.
• 18:00 US FOMC Meeting Minutes.

*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.