Gold Remains Listless as US Records Mixed Numbers

Gold has ticked lower in the Wednesday session. In North American trade, the spot price for an ounce of gold is $1324.62, down 0.14% on the day. On the release front, consumer spending was a disappointment, as Retail Sales declined 0.1%, missing the estimate of 0.3%. On the inflation front, PPI dipped to 0.2%, but still beat the estimate of 0.1%. On Thursday, the US will publish employment claims and the Philly Fed Manufacturing Index.

Gold has been drifting for most of the week, continuing the trend which marked the base metal last week. One reason for the lack of movement is that investors are trying to get a handle on what the Federal Reserve has planned under new chair Jerome Powell. The Fed is expected to continue to raise rates gradually, but a strong economy and the massive tax cuts could mean that the hikes will of greater size and frequency in the past. Any hints about rate policy will likely impact on gold, which moves inversely to interest rate levels.

The Federal Reserve is widely expected to raise interest rates next week. According to the CME Group, the odds of a quarter-point raise stand at 89 percent. What can we expect from the Fed during the year? The pressing question is how many rate hikes will we see in 2018. The current Fed projection remains at three hikes, but the superb nonfarm payrolls report last week has raised speculation that the Fed could accelerate the pace to four hikes, which would be good news for the US dollar. Investors will be keeping a close eye on key US data, especially inflation indicators. If these numbers improve, we’re likely to see four rate hikes in 2018.

XAU/USD Fundamentals

Wednesday (March 14)

• 8:30 US Core Retail Sales. Estimate 0.4%. Actual 0.2%
• 8:30 US PPI. Estimate 0.1%. Actual 0.2%
• 8:30 US Retail Sales. Estimate 0.3%. Actual -0.1%
• 8:30 US Core PPI. Estimate 0.2%. Actual 0.2%
• 10:00 US Business Inventories. Estimate 0.6%. Actual 0.6%
• 10:30 US Crude Oil Inventories. Estimate 2.2M. Actual 5.0M

Thursday (March 15)

• 8:30 US Empire State Manufacturing Index. Estimate 15.2
• 8:30 US Philly Fed Manufacturing Index. Estimate 23.2
• 8:30 US Unemployment Claims. Estimate 230K

*All release times are GMT

*Key events are in bold

XAU/USD for Wednesday, March 14, 2018

XAU/USD March 14 at 12:45 EST

Open: 1326.43 High: 1330.16 Low: 1321.52 Close: 1324.62

XAU/USD Technical

• XAU/USD edged higher in the Asian session but gave up these gains in European trade. The pair has been flat 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

XAU/USD ratio is showing little movement on Wednesday. Currently, long positions have a majority (55%), 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.