Gold Surges on Syria Jitters, Weak CPI

Gold has posted sharp gains in the Wednesday session. In North American trade, the spot price for an ounce of gold is $1360.15, up 1.60% on the day. In economic news, CPI declined 0.1%, shy of the estimate of 0.0%. This marked the first decline since May. Core CPI remained unchanged at 0.2%. Later in the day, the Federal Reserve will release the minutes of the March policy meeting.

Investor sentiment turned negative on Wednesday, as the rhetoric between the US and Russia has ratcheted higher. This has sent gold prices sharply higher. Tensions in the Middle East are high, as Syrian forces allegedly used chemical weapons against rebel positions last week, and a UN Security Council meeting ended inconclusively after Russia cast a veto on a US proposal to probe the attack. US President Trump has warned that a US response is on the way, and Russia has countered that it will respond to any US move. If Trump makes good on his promise, investors could lose their risk appetite and the markets could spiral downwards.

The markets are keeping a close eye on the release of the FOMC minutes. The minutes could provide the markets with some insights regarding the Federal Reserve’s monetary policy for this year. Will the Fed press the rate trigger three times this year, or four? The current Fed forecast calls for three rate hikes, but this could be revised upwards if inflation rises. If the FOMC minutes point to a hawkish stance from policymakers, gold could lose some its glitter.

XAU/USD Fundamentals

Wednesday (April 11)

  • 8:30 US CPI. Estimate 0.0%. Actual -0.1%
  • 8:30 US Core CPI. Estimate 0.2%. Actual 0.2%
  • 10:30 US Crude Oil Inventories. Estimate -0.6M. Actual 3.3M
  • 13:01 US 10-year Bond Auction
  • 14:00 US FOMC Meeting Minutes
  • 14:00 US Federal Budget Balance. Estimate -191B

 Thursday (April 12)

  • 8:30 US Unemployment Claims. Estimate 231K

*All release times are DST

*Key events are in bold

XAU/USD for Wednesday, April 11, 2018

XAU/USD April 11 at 13:20 EST

Open: 1339.72 High: 1365.37 Low: 1339.25 Close: 1361.32

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1285 1307 1337 1375 1416 1443
  • XAU/USD was flat in the Asian session. The pair posted gains in the European session and continues to head upwards in the North American session
  • 1337 is providing support
  • 1375 is the next resistance line.
  • Current range: 1337 to 1375

Further levels in both directions:

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

OANDA’s Open Positions Ratio

In the Wednesday session, XAU/USD ratio is showing short positions with a small majority (52%). This is indicative of slight trader bias towards XAU/USD reversing directions and moving to lower ground.

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.