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XAU/USD – Gold Dips as US Services PMI Climbs

Gold has posted slight losses in the Monday session. In North American trade, the spot price for an ounce of gold is $1174.46. On the release front, there was good news in the services sector, as ISM Non-Manufacturing PMI jumped to 57.2, beating the forecast of 55.3.

November was a dismal month for gold, as the metal dropped 8.0 percent, its sharpest monthly decline since June 2013. Gold continues to trade at its lowest levels since February. A strong US economy has not been good news for the safe-haven metal, as investors have regained an appetite for riskier assets. As well, it is virtually certain that the Federal Reserve will raise interest rates next week, which would mark the first hike by the Fed in a year. Expectations of a rate hike have sent the US dollar broadly higher, which has weighed on gold prices.

Employment numbers were on center stage on Friday, as the US released key employment indicators. In the US, the numbers were a mix. Nonfarm Payrolls improved to 178 thousand, edging above the forecast of 177 thousand. This marked a 4-month high. However, Average Hourly Earnings, which measures wage growth, surprised with a decline of 0.1%, short of the estimate of 0.2%. This was the first decline in wage growth since March. The unemployment rate dropped to just 4.6%, well below the forecast of 4.9%. The strong labor market has been a key factor in the strong US economy, which saw GDP grow at a clip of 3.2% in the third quarter.

XAU/USD Fundamentals

Monday (December 5)

*All release times are EST

*Key events are in bold

XAU/USD for Monday, December 5, 2016

XAU/USD December 5 at 13:10 EST

Open: 1180.22 High: 1181.49 Low: 1156.91 Close: 1174.46

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1111 1130 1146 1174 1205 1223

Further levels in both directions:

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing long positions with a substantial majority (79%). 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 [4]

Market Analyst at OANDA [5]
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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