Gold Steady, Markets Await Unemployment Claims

Gold has edged higher in the Wednesday session. In the North American session, the spot price for an ounce of gold is $1350.29, up 0.23% on the day. In economic news, there are no major indicators. On Thursday, the US releases unemployment claims and the Philly Fed Manufacturing Index.

After last week’s strong fluctuations, gold prices have steadied this week. The volatility has been closely connected to escalating tensions over a chemical attack by the Syrian government on rebel positions. There was uncertainty throughout last week about whether the US would respond, but the markets have settled down since a US-led strike hit Syrian weapon centers on the weekend. Investor risk appetite has improved, but concerns that tensions could quickly reignite have meant that investors are not dumping gold holdings in favor of riskier assets just yet. After the weekend attack, President Trump declaration of “mission accomplished” means that things will remain relatively quiet in Syria. However, further chemical attacks by the Syrian regime could trigger a response from the US and its allies, which could result in volatility in the markets, similar to what occurred last week.

The recent trade battle between the US and China has been overshadowed by events in Syria, but the threat of further tariffs between the world’s largest two economies could again roil the markets and in turn, send gold prices higher. Another salvo was fired on Tuesday, as China slapped a tariff of some 179% on US sorghum crops, which is a livestock feed. China imports about $1 billion of sorghum annually, and the tariff, if it remains in place, will essentially halt US exports of sorghum to China. The Chinese government has threatened to impose tariffs on US soybean exports, valued at some $12 billion each year. If the US opts to retaliate, the specter of an ugly trade war between the US and China could spook investors and send gold to higher levels.

 

XAU/USD Fundamentals

 Wednesday (April 18)

  • 10:30 US Crude Oil Inventories. Estimate -0.5M. Actual -1.1M
  • 14:00 US Beige Book 
  • 15:15 US FOMC Member William Dudley Speaks
  • 16:15 US FOMC Member Randal Quarles Speaks

 Thursday (April 19)

  • 8:30 US Philly Fed Manufacturing Index. Estimate 20.8
  • 8:30 US Unemployment Claims. Estimate 230K

*All release times are DST

*Key events are in bold

 

XAU/USD for Wednesday, April 18, 2018

XAU/USD April 18 at 12:20 DST

Open: 1347.17 High: 1355.81 Low: 1342.38 Close: 1350.50

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1285 1307 1337 1375 1416 1443
  • XAU/USD edged lower in the Asian session. The pair reversed directions and posted gains in European trade. The pair is showing limited movement in 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

XAU/USD ratio is showing small gains towards long positions. Currently, short and long positions are evenly split, indicative of a lack of trader bias towards XAU/USD.

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.