Gold has posted losses on Wednesday, continuing the downward direction which marked the Tuesday session. The metal has dropped 1.6 percent this week. In North American trade, the spot price for one ounce is $1196.54. On the release front, Crude Inventories posted a surplus of 2.8 million, well above the forecast of 1.5 million. On Thursday, the US publishes two key events – Unemployment Claims and New Home Sales.
Donald Trump has barely warmed his new chair in the Oval Office, but dramatic change is already underway. On Monday, Trump signed an executive order formally withdrawing the US from the Trans-Pacific Partnership, a broad trade agreement which the US had signed but not ratified. Trump had promised to leave the TPP during the election, arguing that the deal would hurt American workers. Next stop is NAFTA, which Trump has said he will renegotiate with Canada and Mexico. Trump has taken a tough line on US companies that have moved production outside of the US and has threatened to impose tariffs on companies that move production to Mexico. Predictably, these protectionist measures are raising concerns in the markets that the US economic growth could drop if the US takes an isolationist stance towards global trade, and such a stance would likely weigh on the US dollar and send gold prices upwards. US trade partners could choose to retaliate against Trump’s moves, igniting a trade war in which there are no winners.
Wednesday (January 25)
- 9:00 US HPI. Estimate 0.4%. Actual 0.5%
- 10:30 US Crude Oil Inventories. Estimate 1.5M. Actual 2.8M
Upcoming Key Releases
Thursday (January 26)
- 8:30 US Unemployment Claims. Estimate 247K
- 10:00 US New Home Sales. Estimate 585K
*All release times are EST
*Key events are in bold
XAU/USD for Wednesday, January 25, 2017
XAU/USD January 25 at 13:05 EST
Open: 1209.28 High: 1209.82 Low: 1193.21 Close: 1196.54
- XAU/USD posted small losses in the Asian session and was flat in European trade. The pair has been choppy in the North American session dropping below the $1200 level
- 1174 is providing support
- 1199 has switched to resistance. It is a weak line
- Current range: 1174 to 1199
Further levels in both directions:
- Below: 1174, 1146 and 1130
- Above: 1199, 1232, 1260 and 1285
OANDA’s Open Positions Ratio
XAU/USD ratio is almost unchanged this week. Long positions have a strong majority (70%), indicative of trader bias towards XAU/USD reversing directions 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.