Gold prices continue to rise on Monday, after recording gains over the previous two days. In the North American session, gold is trading at $1334.12, up 0.70% on the day. There are no US indicators on the schedule, as US banks are closed for the Labor Day holiday.
Gold continues to impress, as the metal padded gains of 2.5% last week. Gold is currently trading at its highest level since November 2016. Much of the gains can be attributed to tensions in the Korean peninsula, as nervous investors have flocked to the safe-haven asset. Over the weekend, North Korea announced that it had exploded a hydrogen bomb which could be fitted to an intercontinental ballistic missile. Although the claim has yet to be verified by Western analysts, it is clear that this nuclear device test has again raised tensions between North Korea and the US, Japan and South Korea. Predictably, US President Trump strongly condemned the North Korean action and has not ruled out a military response. With investors showing less appetite for risk, gold continues to benefit from the Korean crisis. If tensions continue to rise between Washington and Pyongyang, traders can expect the gold rally to continue.
US employment numbers were weaker than expected on Friday, and gold responded with slight gains. Nonfarm employment change slowed to 156 thousand, well below the estimate of 180 thousand. This marked a 3-month low. However, with the US labor market still close to capacity (the unemployment rate is just 4.4%), the markets can be forgiving about a softer nonfarm payroll report. Wage growth, or the lack of it, is a more pressing concern. Average Hourly Earnings posted a small gain of 0.1%, missing the estimate of 0.2%. This was down from 0.3% in the previous report, and matched the weakest gain seen in 2017. The lack of wage gains has impacted on inflation levels, which remain well below the Fed’s inflation target of 2%. Soft inflation has dampened enthusiasm for a final rate hike in 2017, with the odds of December increase pegged at just 37%.
Monday (Sep. 4)
- There are no US events on the schedule
XAU/USD for Monday, September 4, 2017
XAU/USD September 4 at 12:15 EST
Open: 1324.88 High: 1340.04 Low: 1324.88 Close: 1334.12
- XAU/USD posted gains in the Asian session. The pair recorded small gains in the European session but then retracted. XAU/USD has been flat in North American trade
- 1307 is providing support
- 1337 was tested earlier in resistance and is a weak line
- Current range: 1307 to 1337
Further levels in both directions:
- Below: 1307, 1285, 1260 and 1232
- Above: 1337, 1367 and 1392
OANDA’s Open Positions Ratio
XAU/USD ratio is showing little movement in the Monday session. Currently, short and long positions are evenly split, indicative of a lack of trader bias as to what direction XAU/USD will take next.