Gold is showing little movement in the Monday session. In North American trade, the spot price for one ounce is $1150.90. On the release front, US markets are closed for New Year’s, so there are no events on the schedule. On Tuesday, manufacturing reports will be in focus, as the US publishes ISM Manufacturing PMI.
A strong US economy has not been good news for gold, as investors have shown more appetite for risk. Gold has slipped 12 percent in the fourth quarter, plunging 12.5% in the fourth quarter. There could be more trouble ahead for gold, as strong economic growth could lead to further interest rate hikes in 2017. As gold moves inversely to interest rate hikes, higher rates would likely send gold to even lower levels.
On Wednesday, the Federal Reserve will release the minutes of the December policy meeting, when the Fed finally raised rates for the first time since December 2015. Analysts will be combing through the minutes, looking for clues as to the Fed’s future monetary policy. The US economy is firing on all cylinders, and the markets are hopeful that this continues after Donald Trump takes office. Trump’s economic policies remain sketchy, although he has promised to increase fiscal spending while lowering taxes. If the economy’s positive momentum continues in early 2017, the Fed could be inclined to raise rates another quarter point in order to prevent the economy from overheating. A rate hike would likely lead to broad gains for the US dollar.
Monday (January 2)
- There are no US releases on the schedule
Tuesday (January 3)
- 10:00 US ISM Manufacturing PMI. Estimate 53.7
XAU/USD for Monday, January 2, 2017
XAU/USD January 2 at 12:55 EST
Open: 1150.28 High: 1152.40 Low: 1149.95 Close: 1150.90
*All release times are EST
* Key events are in bold
- XAU/USD has shown little movement in the Monday session
- 1146 is providing support
- 1174 is the next resistance line
- Current range: 1146 to 1174
Further levels in both directions:
- Below: 1146, 1130, 1111 and 1076
- Above: 1174, 1199 and 1232
OANDA’s Open Positions Ratio
In the Monday session, XAU/USD ratio is commanding a strong majority (81%). This is indicative of trader bias towards XAU/USD breaking out and climbing 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.