Gold Dips, Markets Await Key Employment Data

Gold has posted losses in the Thursday session. In North American trade, the spot price for an ounce of gold is $1320.79, down 0.36% on the day. In economic news, unemployment claims disappointed and climbed to 231 thousand, well above the estimate of 220 thousand. On Friday, the US releases wage growth and nonfarm payrolls, so traders should be prepared from some movement from gold.

The US dollar has been under pressure since US President Trump proposed stiff tariffs on steel imports, much to the consternation of the European Union and other US trading partners. There is also strong domestic opposition to the proposal, as Republican lawmakers, including House Speaker Paul Ryan, have come out against the move. This has raised hopes that Trump will back down. There was further drama on Wednesday, as Gary Cohn, Trump’s chief economic adviser, resigned. Cohn was a strong advocate of free trade, so his resignation could weaken opposition in the White House to the tariffs. Will Trump make good on his threat or back off? Until the situation is resolved, traders should be prepared for continuing volatility in the markets.

Employment numbers continue to be in focus in the latter part of the week. On Wednesday, ADP nonfarm payrolls ticked upwards to 235 thousand, up from 234 thousand a month earlier. This easily beat expectations, boosting investor risk appetite and sending gold prices lower. The nonfarm payrolls report is also expected to remain steady, and if the indicator can again beat expectations, gold could continue to head south.

 

XAU/USD Fundamentals

Thursday (March 8)

  • 7:30 US Challenger Job Cuts. Actual -4.3%
  • 8:30 US Unemployment Claims. Estimate 220K. Actual 231K
  • 10:30 US Natural Gas Storage. Estimate -58B. Actual -57B

Friday (March 9)

  • 8:30 US Average Hourly Earnings. Estimate 0.2%
  • 8:30 US Nonfarm Employment Change. Estimate 201K
  • 8:30 US Unemployment Rate. Estimate 4.0%

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, March 8, 2018

XAU/USD March 8 at 12:50 EST

Open: 1325.62 High: 1329.14 Low: 1319.05 Close: 1320.79

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD edged higher in the Asian session but retracted in European trade. The pair has posted losses in North American trade
  • 1307 is providing support
  • 1337 is the next resistance line
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

The XAU/USD ratio is almost unchanged in the Thursday session. Currently, long positions have a majority (53%), indicative of trader bias towards XAU/USD reversing directions and moving higher.

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

Currency Analyst at Market Pulse
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.