XAU/USD – Gold Edges Lower, Markets Eye Jobless Claims, Fed Minutes

Gold continues to have an uneventful week. In Tuesday’s North American session, the metal is trading at $1212.95. In economic news, Existing Home Sales jumped to 5.60 million, well above the forecast of 5.47 million. As well, the Richmond Manufacturing Index improved to 4 points, beating the estimate of 1 point. Wednesday will be much busier, with a host of key releases in the US, highlighted by Core Retail Sales and the FOMC meeting minutes and Crude Oil Inventories.

Gold Recovering After USD Cools Down

The US dollar has posted broad gains since the US election on November 8, and gold prices have dropped some 5.6 percent in that period. With a rate hike in December a near-certainty, sentiment towards the dollar should remain high and gold prices could drop below the $1200 level. However, with a new government taking over the reins, what will happen in early 2017 is a big question mark, and the uncertainty swirling around Trump’s economic agenda could help the safe-haven metal lick its wounds and move higher once Trump takes office. Trump’s election promises of more spending and less taxes have been vague and we will have to wait for the new Trump administration to unveil a detailed economic platform. The Federal Reserve is in favor of gradual rate hikes next year, but this plan is based on the assumption that the US economy will continue to strengthen. In testimony before a congressional committee last week, Fed chair Janet Yellen acknowledged the uncertainty created by Trump’s victory and said that the Fed might have to adjust its outlook, based on the new administration’s economic policies.

XAU/USD Fundamentals

Tuesday (November 22)

  • 10:00 US Existing Home Sales. Estimate 5.43M. Actual 5.60M
  • 10:00 US Richmond Manufacturing Index. Estimate 1 point. Actual 4 points

Wednesday (November 23)

  • 8:30 US Core Retail Sales. Estimate 0.6%
  • 8:30 US Retail Sales. Estimate 0.7%
  • 8:30 US Core Durable Goods Orders. Estimate 0.2%
  • 8:30 US Unemployment Claims. Estimate 241K
  • 10:00 US New Home Sales. Estimate 591K
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 91.6
  • 14:00 US FOMC Meeting Minutes

*All release times are EST

*Key events are in bold

XAU/USD for Tuesday, November 22, 2016

XAU/USD November 22 at 12:20 EST

Open: 1206.23 High: 1217.77 Low: 1206.21 Close: 1212.95

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1146 1174 1205 1223 1245 1279
  • XAU/USD showed limited movement in the Asian and European sessions. The pair has posted slight losses in North American trade
  • 1205 is a weak support line
  • There is resistance at 1223
  • Current range: 1205 to 1223

Further levels in both directions:

  • Below: 1205, 1174 and 1146
  • Above: 1223, 1245, 1279 and 1290

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight gains in long positions. Currently, long positions have a substantial majority (81%). This is indicative of trader bias towards XAU/USD reversing directions and moving to higher levels.

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.