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XAU/USD – Gold Dips to 2-Week Lows on Mixed US Data

Gold has posted slight gains on Thursday, as the metal trades at a spot price of $1316.74 per ounce in the North American session. On the release front, Thursday was a data-heavy session after an uneventful few days. In the US, retail sales came in at -0.3%, weaker than the estimate of -0.1%. Unemployment Claims were close to the forecast, and the Philly Fed Manufacturing Index easily beat expectations. On Friday, the US releases CPI and UoM Consumer Sentiment.

Gold prices have dropped one percent this week, as the markets continue to speculate about a Federal Reserve rate hike. Will the downward trend continue? Gold prices are sensitive to interest rate moves, so we can expect some movement from the base metal in the days ahead of the Federal Reserve policy meeting on September 21. Recent comments from FOMC members have done little to clarify what are Fed’s monetary plans for the remainder of the year. As things currently stand, a September hike has been priced in at 15%, while the likelihood of a December move is 43%. These numbers could drop after unimpressive data from US retail sales reports on Thursday. Retail Sales declined 0.3% in August, marking its first decline in five months. There was no relief from Core Retail Sales, which fell 0.1% and missed expectations. The weak retail sales numbers point to softness in consumer spending, a key driver of economic growth. There was also some positive news, as unemployment claims remained steady at 260 thousand, slightly below the forecast. As well,the Philly Fed Manufacturing soared with a reading of 12.8 points, crushing the estimate of 1.1 points. This marked the indicator’s highest monthly gains since June 2015. Next up are consumer inflation and confidence reports, which will be released on Friday. US inflation numbers have been very soft for months, and little change is expected in the August releases. If US inflation numbers disappoint the markets, the odds of a rate hike in 2016 will decrease, and this could boost gold prices.

XAU/USD Fundamentals

Thursday (September 15)

Upcoming Key Events

Friday (September 16)

*Key releases are highlighted in bold

*All release times are EDT

XAU/USD for Thursday, September 15, 2016

XAU/USD September 15 at 13:00 EDT

Open: 1322.73 High: 1328.24 Low: 1309.27 Close: 1316.74

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1245 1279 1307 1331 1361 1388

Further levels in both directions:

OANDA’s Open Positions Ratio

XAU/USD ratio is showing movement towards long positions on Thursday. Currently, long positions have a strong majority (74%), indicative of trader bias towards XAU/USD reversing directions and moving upwards. 

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 [4]

Currency Analyst at Market Pulse [5]
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.
Kenny Fisher

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