Gold Stays Steady Close to $1200

Gold is showing little movement on Friday, continuing the lack of activity we have seen for most of the week. In the European session, the spot price stands at $1197.48. There are no US releases on Friday, so traders can expect a quiet day from XAU/USD as we head into the weekend.

In the US, employment numbers continued to impress, as unemployment claims dropped to 289 thousand, the lowest level in six weeks. The easily beat the estimate of 297 thousand. The news was not as good on the manufacturing front, as the Philly Fed Manufacturing Index slid to 24.5 points, down from 40.6 points in November. The November reading was unusually high, and the markets had expected a sharp downturn, with the estimate standing at 26.3 points.

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 as an interest rate hike by mid-2015 seems likely, there is room for the dollar to make gains against gold.

XAU/USD for Friday, December 19, 2014

XAU/USD December 19 at 10:55 GMT

XAU/USD 1197.48 H: 1201.30 L: 1193.84

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1130 1156 1175 1200 1240 1255

 

  • XAU/USD has shown little movement in the Asian and European sessions, as the pair trades close to the key line of 1200.
  • 1200 is a weak resistance line. 1215 is next.
  • 1175 is an immediate support level.
  • Current range: 1175 to 1200

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 almost unchanged on Friday. This is consistent with the lack of movement we are seeing from the pair. 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

  • There are no releases on Friday.

 

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.