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XAU/USD – Gold Dips, Markets Eye Consumer Confidence

Gold has posted losses on Thursday, erasing the gains seen in the Wednesday session. In North American trade, the spot price for one ounce is $1232.86. In economic news, unemployment claims dipped fell to 234 thousand, well short of the forecast of 249 thousand. On Friday, the major event in the US is UoM Consumer Sentiment,with an estimate of 97.9 points.

Will the Trump effect, which took America by storm, cross over to Europe? There is increasing uneasiness in the markets as populist, far-right parties are gaining support in France, the Netherlands and Germany,  threatening the old order. First up is France – the country goes to the polls in April, and Marie Le Pen, the far-right candidate in the ring, is leading in the polls ahead of the first round of voting. Le Pen is not only a strong supporter of Donald Trump, but is hoping to pull off a Trump-style upset win. Although Le Pen is not expected to win the presidency, neither was Trump. Le Pen wants to take France out of the Eurozone and has promised a referendum on France’s membership out of the European Union.

During the US election campaign, Donald Trump hammered away at the ills of the US economy, but was short on specifics as far as remedies. However, he did promise a significant fiscal boost through infrastructure spending and tax cuts. This led to a post-election euphoria in the markets and boosted the US dollar. Fast forward to February, and optimism has been replaced by caution and unease, as Trump continues to entangle himself in controversy, both with US trading partners and at home, with the media and Supreme Court. The markets are disappointed that Trump has not unveiled an economic plan or blueprint, limiting himself to protectionist rhetoric which has sent alarm bells ringing worldwide. On Wednesday, Goldman Sachs forecast that the administration won’t implement tax reform or infrastructure spending before 2018. If so, markets may have to wait a while longer before Trump puts an economy policy in place.

 

XAU/USD Fundamentals

Thursday (February 9)

Friday (February 10)

*All release times are EST

*Key events are in bold

 

XAU/USD for Thursday, February 9, 2017

XAU/USD February 9 at 12:35 EST

Open: 1239.77 High: 1244.54 Low: 1230.45 Close: 1232.86

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1175 1199 1232 1260 1285 1307

Further levels in both directions:

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Thursday session. Currently, long positions with a strong majority (64%), 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]

Currency Analyst at Market Pulse [5]
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.
Kenny Fisher

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