Gold Losses Continue as Markets Eye Job Numbers

After an uneventful start to the week, gold has resumed its southward trek. The metal’s spot price is down to $1139.58 per ounce late in the European session, as gold prices are at their lowest since April 2010. On the release front, there are two major events – ADP Non-Farm Employment Change and US ISM Non-Manufacturing PMI.

The US economy continues to improve and job data have looked solid of late. We’ll get a look at key employment releases, starting with the ADP Non-Farm Employment Change on Wednesday. The markets are expecting a reading of 214 thousand, almost unchanged from last month’s figure of 213 thousand. Will the indicator beat expectations for a second straight month?

Earlier in the week, the EU released its Economic Forecasts for the Eurozone over the next two years. EU Vice President Jyrki Katainen said that the economic and employment situation is “not improving fast enough” in the zone, which continues to struggle with very weak growth and high unemployment. The EU noted that growth is expected to reach just 0.8%, growth this year, and heavyweights Germany and France are expected to post weak growth for 2014.

XAU/USD for Wednesday, November 5, 2014

XAU/USD November 5 at 12:20 GMT

XAU/USD 1139.58 H: 1139.62 L: 1137.62

XAU/USD Technical

• Gold lost ground in the Asian session. The pair is showing little change in European trade.
• 1156 has reverted to a resistance role as gold prices continue to lose ground. 1175 is next.
• 1130 is a weak support line. 1111 is stronger.
• Current range: 1130 to 1156.

Further levels in both directions:

• Below: 1130, 1111, 1073 and 1041
• Above: 1156, 1175, 1200, 1215 and 1240

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Wednesday. This is consistent with the pair’s movement, as gold has resumed its losing ways. The ratio has a majority of long positions, indicative of trader bias in favor of gold reversing direction and moving higher.

XAU/USD Fundamentals

• 13:15 US ADP Non-Farm Employment Change. Estimate 214K.
• 14:15 US FOMC Member Narayana Kocherlakota Speaks.
• 14:45 US Final Services PMI. Estimate 57.3 points.
• 15:00 US ISM Non-Manufacturing PMI. Estimate 58.2 points.
• 15:30 US Crude Oil Inventories. Estimate 1.8M.

*Key releases are highlighted in bold

*All release times are GMT

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