Gold Dips as Markets Eye Greece Bailout Standoff

Gold prices have dropped on Tuesday, as the metal is trading at a spot price of $1222.96 in the European session. In the US, today’s highlight is the Empire State Manufacturing Index. The markets are expecting the indicator to soften in the February report.

The Greece bailout crisis continues, as Eurozone finance ministers (Eurogroup) abruptly halted talks on Monday aimed at reaching an agreement between Greece and its creditors. The bailout agreement expires at the end of February, and Eurogroup head Jeroen Dijsselbloem said that Greece must accept the next installment of funds under current bailout conditions. For its part, Greece has demanded easier austerity conditions while continuing to have access to bailout funds. Another meeting of the Eurogroup has been planned for Friday, and the markets will be nervously following developments on the bailout front during the week. The stakes are high, as lack of an agreement could lead to Greece leaving the Eurozone and abandoning the euro.

US releases wrapped up a disappointing week on a sour note, as the UoM Consumer Sentiment slipped for the first time in five months. The key indicator dropped to 93.6 points, down sharply from 98.2 in the previous report. On Thursday, retail sales and jobless numbers softened. Core Retail Sales declined by 0.9%, while Retail Sales dropped by 0.8%. Both indicators were well off their estimates of -0.4%. There was no relief from unemployment claims, which jumped to 304 thousand, compared to 284 thousand in the previous reading. The markets had expected a stronger reading of 282 thousand.

XAU/USD for Tuesday, February 17, 2015

XAU/USD February 17 at 9:50 GMT

XAU/USD 1222.96 H: 1234.01 L: 1220.68

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1175 1200 1215 1240 1255 1275

 

  • XAU/USD has showed little movement in the Asian session. The pair is slightly lower in the European session.
  • 1240 remains a weak resistance line. 1255 is next.
  • 1215 is a weak support level.
  • Current range: 1215 to 1240

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged on Tuesday. This is not consistent with the pair’s movement, as gold has posted slight losses. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

  • 13:30 US Empire State Manufacturing Index. Estimate 8.9 points.
  • 15:00 US NAHB Housing Market Index. Estimate 58 points.
  • 21:00 US TIC Long-Term Purchases. Estimate 41.3B.

*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.