XAU/USD – Gold Climbs Ahead of Fed Announcement

Gold has posted strong gains in the Tuesday session, climbing one percent. In North American trade, the metal is trading at a spot price of $1290.49 per ounce. On the release front, ISM Manufacturing PMI came in at 51.9 points, edging above the forecast of 51.8 points. On Wednesday, the Federal Reserve concludes its monthly policy meeting and is expected to maintain the benchmark interest rate at 0.25 percent. As well, the US releases ADP Employment Change, which precedes the official Nonfarm Employment change report on Friday.

In the US, there was positive news from the consumer front on Monday, as Personal Spending rebounded with a 0.5% gain in September, after a flat reading of 0.0% in August. Gold responded to the reading with slight losses. This release comes on the heels of a disappointing consumer spending report on Friday, as UoM Consumer Sentiment fell to 87.2 points in October, below expectations and dropping to its lowest level since August 2015.  The Fed will also hold a policy meeting on Wednesday, but the markets aren’t expecting a rate move so close to the US presidential election. The rate statement will be carefully monitored, as analysts comb for hints about the extent of support among FOMC members ahead of the crucial December meeting.

XAU/USD Fundamentals

Tuesday (November 1)

  • 9:45 US Final Manufacturing PMI. Estimate 53.3. Actual 53.4
  • 10:00 US ISM Manufacturing PMI. Estimate 51.8. Actual 51.9
  • 10:00 US Construction Spending. Estimate 0.5%. Actual -0.4%
  • 10:00 US IBD/TIPP Economic Optimism. Estimate 48.7. Actual 51.4
  • 10:00 US ISM Manufacturing Prices. Estimate 54.0. Actual 54.5
  • All Day – US Total Vehicle Sales. Estimate 17.5M

Wednesday (November 2)

  • 8:15 US ADP Nonfarm Employment Change. Actual 166K
  • 14:00 FOMC Statement
  • 14:00 Federal Funds Rate. Estimate <0.50%. Actual <0.50%

*All release times are EDT

*Key events are in bold

XAU/USD for Tuesday, November 1, 2016

XAU/USD November 1 at 12:40 EDT

Open: 1276.06 High: 1290.79 Low: 1275.63 Close: 1290.49

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1223 1245 1279 1290 1307 1331
  • XAU/USD was flat in the Asian session. The pair has posted gains in the European and North American sessions
  • 1279 is providing support
  • 1290 is fluid and is currently a weak resistance line
  • Current range: 1279 to 1290

Further levels in both directions:

  • Below: 1279, 1245, 1223 and 1199
  • Above: 1290, 1307 and 1331

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight gains in short positions. Currently, long positions command a substantial majority (71%), indicative of trader bias towards XAU/USD continuing to move 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

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.