Slight Gains for Gold Against Sluggish Greenback

Gold has posted slight gains in the Wednesday session. In the North American session, the spot price for one ounce of gold is $1299.37, up 0.24% on the day. On the release front, there are no major US events. We’ll get a look at unemployment claims on Thursday.

As fears of a global trade war increase, gold could be the big winner if the world’s major economies don’t sit down and settle their disagreements, without resorting to stiff tariffs against their competitors. A major test for the world’s biggest economies will take place in Canada on June 8, as the G-7 leaders meet. Last week, finance ministers from six members of the G-7 were united in their criticism of US Treasury Secretary Steve Mnuchin over the brewing trade war. The trouble started last week, when the Trump administration slapped stiff tariffs on Canada, Mexico and the European Union. This resulted in promises of retaliation, and Canada and Mexico have already announced duties on U.S products. The trade spat is sure to dominate the summit, but will the leaders resolve matters? If not, investors could head for the hills and dump their riskier assets in favor of safe-haven gold.

After weeks of speculation, the much-anticipated summit between the US President Trump and North Korean President Kim Jong-un is back on. The two leaders will meet on June 12 in Singapore, marking the first ever face-to-face meeting between leaders of the U.S and North Korea. Trump has tried to lower expectations, saying the sides are unlikely to reach an agreement over North Korea relinquishing its nuclear weapons. Still, the fact that the two leaders are meeting is a sign that significant progress is being made in the long-standing dispute between the two Koreas.

XAU/USD Fundamentals

Wednesday (June 6)

  • 8:30 US Revised Nonfarm Productivity. Estimate 0.7%. Actual 0.4%
  • 8:30 US Revised Unit Labor Costs. Estimate 2.7%. Actual 2.9%
  • 8:30 US Trade Balance. Estimate -50.0B. Actual -46.2B
  • 10:30 US Crude Oil Inventories. Estimate -2.0M. Actual 2.1M

Thursday (June 7)

  • 8:30 US Unemployment Claims. Estimate 223K

*All release times are DST

*Key events are in bold

XAU/USD for Wednesday, June 6, 2018

XAU/USD June 6 at 12:40 DST

Open: 1296.03 High: 1301.87 Low: 1293.90 Close: 1299.37

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1236 1260 1285 1307 1337 1375

XAU/USD was flat in the Asian session. In European trade, the pair posted slight losses but then recovered. XAU/USD has posted gains in North American trade

  • 1285 is providing support
  • 1307 is the next resistance line
  • Current range: 1285 to 1307

Further levels in both directions:

  • Below: 1285, 1260 and 1236
  • Above: 1307, 1337, 1375 and 1416

OANDA’s Open Positions Ratio

In the Wednesday session, XAU/USD ratio is showing long positions with a majority (70%). This is indicative of trader bias towards XAU/USD continuing to move to higher 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.Gold

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.