Gold Posts Slight Losses Ahead of US Employment, Retail Sales Reports

Gold prices are steady on Thursday, after posting strong gains a day earlier. In the European session, the spot price stands at $1221.86. On the release front, the ECB will offer long-term loans under its TLTRO program. In the US, today’s major events include unemployment claims and retail sales.

The ECB will make its second TLTRO (Targeted Long Term Refinancing Option) on Thursday. This lending program aims to bolster the economy by increasing bank lending to the real economy. The first TLTRO in September was not a success, as the take-up by European banks amounted to 82.3 billion euros, well off the estimate. The estimate for the TLTRO stands at EUR 148.2 billion, but if the take-up is low, there will be more pressure on the ECB to introduce quantitative easing early in 2015.  Meanwhile, 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.

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. Last week, 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.

XAU/USD for Thursday, December 11, 2014

XAU/USD December 11 at 11:15 GMT

XAU/USD 1221.86 H: 1232.72 L: 1217.75

 

XAU/USD Technical

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

 

  • XAU/USD has shown limited movement in the Asian and European sessions.
  • On the downside, 1215 remains under pressure. The round number of 1200 is next.
  • 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 unchanged on Thursday. This is not consistent with the pair’s movement, as gold has posted small losses. The ratio is almost evenly split between long and short positions, indicative of a lack of trader bias as to what direction gold will take next.

XAU/USD Fundamentals

  • 10:15 ECB Targeted LTRO. Estimate 148.2B.
  • 13:30 US Core Retail Sales. Estimate 0.1%.
  • 13:30 US Retail Sales. Estimate 0.4%.
  • 13:30 US Unemployment Claims. Estimate 299K.
  • 13:30 US Import Prices. Estimate -1.7%.
  • 15:00 US Business Inventories. Estimate 0.2%.
  • 15:30 US Natural Gas Storage. Estimate -45B.
  • 18:01 US 30-year Bond Auction.

*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.