Gold Steady Ahead of ADP Nonfarm Payrolls

Gold prices are steady on Wednesday, as the metal is trading at a spot price of $1267.42. In the US, there are two key releases on the calendar – ADP Nonfarm Employment Change and ISM Non-Manufacturing PMI.

US employment numbers will be in the spotlight for the remainder of the week, led by ADP Nonfarm Employment later on Wednesday. The markets are expecting the indicator to soften in the January report. The estimates for Unemployment Claims and the official Nonfarm Employment Change also call for weaker readings. If the forecasts prove correct that the labor market has started off 2015 on a weak note, we could see gold take advantage and move higher against the dollar.

With the new Greek government looking to renegotiate its debt, Greece and its international creditors will have to reach some accommodation over Greece’s EUR 320 billion bailout program. European Commission President Jean-Claude Juncker has offered an olive branch to Athens, saying he is willing to scrap the troika mission, which represents the European Commission, ECB and the IMF and governs the bailout. However, he ruled out writing off any part of Greece’s debt. The new Greek government has stated it wishes to remain in the Eurozone but does not want to accept more bailout funds under the present agreement. Germany, which essentially calls the shots with regard to the bailout, has taken a hard line as it doesn’t want the Greek situation to set a precedent for other Eurozone members who have received bailouts. It is early going in this newest Greek saga, and the plot is sure to thicken.

XAU/USD for Wednesday, February 4, 2015

XAU/USD February 4 at 11:40 GMT

XAU/USD 1267.42 H: 1271.56 L: 1256.81

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1215 1240 1255 1275 1300 1322

 

  • XAU/USD has shown limited movement in the Asian and European sessions.
  • 1275 continues to see action and has reverted to a resistance line. 1300 is stronger.
  • 1255 is providing weak support. 1240 is next.
  • Current range: 1255 to 1275

Further levels in both directions:

  • Below: 1255, 1240, 1215 and 1200
  • Above: 1275, 1300, 1322, 1345 and 1375

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Wednesday, continuing the trend seen a day earlier. This is consistent with the pair’s movement as gold has posted small gains. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

  • 13:15 US ADP Non-Farm Employment Change. Estimate 224K.
  • 14:45 US Final Services PMI. Estimate 54.3 points.
  • 15:00 US ISM Non-Manufacturing PMI. Estimate 56.6 points.
  • 15:30 US Crude Oil Inventories. Estimate 4.0M.

*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.