Gold Climbs to 6-Week High

Gold prices are steady on Wednesday, after posting strong gains a day earlier. In the European session, the spot price stands at $1228.10. On the release front, there are no major US events. Today’s highlight is Crude Oil Inventories.

US employment data has rebounded in impressive fashion and the good news continued on Tuesday, as JOLTS Job Openings climbed to 4.83 million, up from 4.74 million a month earlier. This beat the estimate of 4.81 million. On Friday, Nonfarm Payrolls shot up to 321 thousand in November, stunning the markets which had expected a rise of 231 thousand. There was also a rise in wages, which should translate into stronger inflation numbers. The unemployment rate held steady at 5.8%, matching the forecast. The excellent Nonfarm Payrolls should help allay concerns about whether the economy can weather an expected rate increase in 2015.

The Eurozone continues to struggle with low inflation levels, and a senior ECB official is warning of deflation dangers. Speaking in Washington on Tuesday, ECB board member Peter Praet said that falling oil prices could push Eurozone inflation into negative territory. Such a scenario would spell bad news for the sluggish Eurozone economy and could push the euro to lower levels.

XAU/USD for Wednesday, December 10, 2014

XAU/USD December 10 at 10:40 GMT

XAU/USD 1228.10 H: 1238.25 L: 1227.35

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1175 1200 1215 1240 1255 1275

 

  • XAU/USD edged higher in the Asian session but surrendered these gains in European trade.
  • 1215 has reverted to a support role following the pair’s strong gains. The round number of 1200 follows.
  • 1240 is an immediate resistance line.
  • Current range: 1215 to 1240

Further levels in both directions:

  • Below: 1215, 1200, 1175, 1156 and 1130
  • Above: 1240, 1255, 1275 and 1290

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Wednesday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as gold has posted small losses. The ratio is made up of a majority of long positions, indicative of trader bias towards gold moving higher.

XAU/USD Fundamentals

  • 15:30 US Crude Oil Inventories. Estimate -2.6M.
  • 18:01 US 10-year Bond Auction.
  • 19:00 US Federal Budget Balance. Estimate -68.3B.

*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

Currency Analyst at Market Pulse
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.