Gold Steady After Sharp Losses

Gold prices are unchanged on Monday, as the metal is trading at a spot price of $1241.02. In the US, it’s a quiet start to the week, with just one indicator on the schedule – the Labor Market Conditions Index.

Gold dropped 2.4% on Friday, as US Nonfarm Payrolls improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The strong reading has reinforced expectations for a mid-year interest rate cut by the Federal Reserve, which would be a boost for the US dollar.

The Greek government suffered a setback on Friday, as the Standard and Poor’s rating agency downgraded Greece’s debt from B to B-, which is just one level above default. S&P also kept the outlook as “negative”, which indicates that further cuts are possible. This follows the ECB announcement that it will no longer accept Greek government bonds as collateral for ECB loans as of February 11. For its part, Greece has pledged not renew the bailout program, which will expire at the end February. There will likely be more developments during the week in Brussels, as EU finance ministers meet on Wednesday, and German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras attend an EU meeting on Thursday.

XAU/USD for Monday, February 9, 2015

XAU/USD February 9 at 11:25 GMT

XAU/USD 1238.81 H: 1243.75 L: 1235.22

XAU/USD Technical

• XAU/USD has started the week with little movement.
• On the upside, 1240 is fluid.  1255 is stronger.
• 1215 is an immediate support level.
• Current range: 1215 to 1240

Further levels in both directions:

• Below: 1215, 1200 1175 and 1154
• Above: 1240, 1255, 1275, 1300, 1322 and 1345

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Monday. This is consistent with the pair’s sharp drop on Friday, which led to short positions being covered and thus an increase in open long positions. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

• 15:00 US Labor Market Conditions Index.
• 21:00 US FOMC Member Jerome Powell Speaks.

*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.