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XAU/USD – Gold Woes Continues, FOMC Minutes Ahead

Gold is showing limited movement on Wednesday, as the metal trades at a spot price of $1070.20 in the European session. Gold prices continue to soften, and lost over 1.0% of its value on Tuesday. Gold is currently trading at its lowest level since February 2010. Will the sharp slide continue? Taking a look at economic news, today’s key release is Building Permits, with the markets expecting an improvement to 1.15 million. Later on Wednesday, the Federal Reserve will release the minutes of its October policy meeting, and the markets will be keenly interested in the comments of policymakers regarding a rate hike.

The guessing game continues as to whether the Federal Reserve will kick off a series of rate hikes in December, so the markets will be carefully combing through the Fed minutes, which will be released later n Wednesday. Market [1] expectations have risen to 66% that the Fed will make a move next month [1]. The last time the Fed raised interest rates was in June 2006, so such a move is sure to have a significant effect on the global currency markets. With the US economy close to full employment and many economic indicators pointing upwards, one of the last pieces in the puzzle is inflation. Last week’s PPI was awful, posting a second straight decline. On Tuesday, CPI and Core CPI posted small gains of 0.2%, matching the forecast. Are these lukewarm readings enough to convince the Fed to make a move in December? The Fed has said that inflation levels are an important factor in determining its decision in December, but with US inflation stuck at low levels, it remains a guessing game as to whether the Fed will press the rate trigger at its next policy meeting.

The US economy has certainly improved, but the manufacturing sector continues to lag behind. Earlier this week, the Empire State Manufacturing Index posted its fourth straight decline, underlining worsening conditions in the manufacturing sector. In November, the indicator came in at -10.7 points, weaker than the forecast of -5.3 points. We’ll get another look at manufacturing data, with the release of the Philly Fed Manufacturing Index. This indicator has also struggled, posting two straight declines. The markets are expecting some improvement in the November report, with an estimate of 0.1 points.

 XAU/USD Fundamentals

Wednesday (Nov. 18)

Upcoming Key Events

Thursday (Nov. 19)

*Key releases are highlighted in bold

*All release times are GMT


XAU/USD for Wednesday, November 18, 2015

Forex Rate Graph 21/1/13

XAU/USD November 18 at 12:10 GMT

XAU/USD 1069 H: 1072 L: 1063


XAU/USD Technical

S3 S2 S1 R1 R2 R3
980 1024 1043 1080 1098 1134

Further levels in both directions:


OANDA’s Open Positions Ratio

XAU/USD ratio has shown movement towards short positions, as long positions retain a commanding majority (72%). This is indicative of trader bias towards gold prices moving higher.

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 [5]

Market Analyst at OANDA [6]
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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