Gold above $1300 after truce reached over shutdown

Gold prices are almost unchanged on Monday, after the metal posted strong gains to end the week. In North American trade, the spot price for one ounce of gold is $1303.08, unchanged on the day. In economic news, there are no U.S. events on the schedule. On Tuesday, the key U.S. release is CB Consumer Confidence.

The U.S. dollar retreated on Friday, after a breakthrough in the U.S. government shutdown crisis. President Trump agreed to reopen government services for a 3-week period, even though he did not receive any funds for his border wall with Mexico. Trump and Congress have been deadlocked over funding for a border wall, but Trump agreed to the temporary measure without securing any funding for his wall. Risk sentiment jumped, as investors are optimistic that the temporary deal will lead to an agreement which resolves the shutdown. Gold took full advantage of the dollar’s weakness, jumping 1.75% and hitting its highest level since early June.

The U.S labor market continues to impress the markets. as unemployment claims dropped sharply, from 213 thousand to 199 thousand. This was the first time that the indicator dropped below the 200-thousand level since 1969. The four-week average, which is less volatile, dropped by 5.5 thousand to 215,000. The strong figures indicate that the employment picture remains bright, despite the ongoing U.S. government shutdown, which has resulted in the layoff of some 800,000 government workers.

Brexit, trade war, Fed and US jobs this week

Euro firmer on US dollar slippage, ratings

Be prepared, it’s an action-packed week in capital markets

XAU/USD Fundamentals

Monday (January 28)

  • There are no U.S. events

Tuesday (January 29)

  • 10:00 US CB Consumer Confidence. Estimate 125.0

*All release times are EST

*Key events are in bold

XAU/USD for Monday, January 28, 2019

XAU/USD January 28 at 11:50 EST

Open: 1303.20 High: 1304.52 Low: 1297.77 Close: 1303.08

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1236 1261 1284 1306 1326 1344

In the Asian session, XAU/USD posted slight gains, but then gave these up in European trade. The pair has posted small gains in North American trade

  • 1284 is providing support
  • 1306 is the next resistance line
  • Current range: 1284 to 1306

Further levels in both directions:

  • Below: 1284, 1261, 1236 and 1220
  • Above: 1306, 1326 and 1344

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.