Gold Jumps on Weak US Retail Sales

Gold has posted strong gains on Thursday, taking advantage of weak US retail sales a day earlier. In European trade, the spot price is $1254.59 per ounce. It’s a busy day in the US, highlighted by Unemployment Claims. We’ll also get a look at PPI and the Philly Fed Manufacturing Index.

US retail sales caught the markets off guard, with sharp declines in the December readings. Core Retail Sales came in at -1.0%, while Retail Sales followed suit with a loss of 0.9%. Both key indicators recorded their worst showings since May 2010. However, retail sales were solid in the past two months, so the numbers for Q4 will be in positive territory.

US job numbers have looked sharp, and the trend continued on Tuesday, as JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be closely watched by the markets.

XAU/USD for Thursday, January 15, 2015

XAU/USD January 15 at 13:00 GMT

XAU/USD 1254.59 H: 1260.61 L: 1226.18

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1200 1215 1240 1255 1275 1300

 

  • XAU/USD was flat in the Asian session. The pair has posted strong gains, breaking above resistance at 1240.
  • On the upside, 1255 is under strong pressure. Will this line break during the North American session? 1275 is next.
  • 1240 is an immediate support line.
  • Current range: 1240 to 1255

Further levels in both directions:

  • Below: 1240, 1215, 1200, 1175 and 1156
  • Above: 1255, 1275, 1300 and 1322

 

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged on Thursday. This is not consistent with the pair’s movement, as gold continues to post gains. The ratio remains close to a split between long and short positions, indicating a lack of trader bias as to what direction the pair will take next.

XAU/USD Fundamentals

  • 13:30 US PPI. Estimate -0.3%.
  • 13:30 US Unemployment Claims. Estimate 299K.
  • 13:30 US Core CPI. Estimate 0.2%.
  • 15:00 US Empire State Manufacturing Index. Estimate 5.3 points.
  • 15:00 US Philly Fed Manufacturing Index. Estimate 20.3K.
  • 15:30 US Natural Gas Storage. Estimate -224B.

*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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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