Gold Posts Modest Gains, Shrugs off Fed Statement

Gold is showing little movement on Thursday, as the pair continues to trade close to the $1200 line. In the European session, the spot price stands at $1205.12. Later in the day, the US will release Unemployment Claims and the Philly Fed Manufacturing Index. If either of these key indicators produces unexpected numbers, we could see some volatility from XAU/USD.

Previous Fed policy statements have usually stated that the Fed would maintain low rates for a “considerable time”, but the December statement changed terminology, saying the Fed would be “patient” before raising rates. In a follow-press conference, Federal Reserve chair Janet Yellen was less ambiguous, saying that the Fed was unlikely to raise rates for the “next couple of meetings”. The markets took this to mean that a rate hike is in the works, but not before April. Gold prices remained steady after the Fed statement, but increasing talk of an interest rate hike by mid-2015 could boost the dollar against gold.

XAU/USD for Thursday, December 18, 2014

XAU/USD December 18 at 12:45 GMT

XAU/USD 1205.12 H: 1206.92 L: 1203.63

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1156 1175 1200 1215 1240 1255

 

  • XAU/USD moved higher in the Asian session. This has continued in the European session, with the pair breaking above resistance at 1200.
  • 1215 is an immediate resistance line. 1240 is next.
  • 1200 remains active and has reverted to a support level. It is a weak line and could see further activity during the North American session. 1175 is stronger.
  • Current range: 1200 to 1215

Further levels in both directions:

  • Below: 1200, 1175, 1156, 1130 and 1111
  • Above: 1215, 1240, 1255 and 1275

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions on Thursday. This is not consistent with the pair’s movement, as gold has posted gains. The ratio has a majority of long positions, indicative of trader bias towards gold breaking out of range and moving to higher ground.

XAU/USD Fundamentals

  • 13:30 US Unemployment Claims. Estimate 297K.
  • 14:45 US Flash Services PMI. Estimate 57.1 points.
  • 15:00 US Philly Fed Manufacturing Index. Estimate 26.3 points.
  • 15:00 US CB Leading Index. Estimate 0.6%.
  • 15:30 US Natural Gas Storage. Estimate -61B.

*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.