Gold Unchanged at $1060, US Jobless Claims Disappoint

Gold is having a quiet day, trading at $1061.83 per ounce in the North American session. In economic news, US Unemployment Claims rose to 287 thousand, higher than expected. There was more bad news as Chicago PMI plunged to 42.8 points in December, well off expectations, and much weaker the November reading of 48.7 points.

There hasn’t been much to cheer about when it comes to gold, as the base metal as plunged 10 percent over the course of 2015. Gold took a hit in the aftermath of the Federal Reserve’s rate hike, and briefly dropped below the $1050 level, marking its lowest level since February 2010. There has been some improvement since then, but with the US dollar remaining strong, the downward trend could resume as we head into 2016.

The US economy is ending 2015 on a positive note, and was given a critical vote of confidence by the Federal Reserve, which raised interest rates earlier in the month for the first time in almost 10 years. Despite the generally rosy picture, signs of weakness remain, such as the housing sector. On Wednesday, Pending Home Sales was unexpectedly soft, posting a decline of 0.9%, compared to an estimate of a 0.6% gain. Recent housing indicators have also fallen below expectations. Meanwhile, CB Consumer Confidence sparkled in the December report, as the key indicator jumped to 96.5 points, up sharply from 90.4 points a month earlier. This easily beat the estimate of 93.9 points. This excellent reading followed a solid UoM Consumer Sentiment, which improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. Strong consumer demand has been an important factor in the strength of the US economy, which led to the historic rate hike by the Federal Reserve earlier in December. The recent rate hike is expected to be the first in a series of incremental rate hikes over the course of 2016, and higher interest rates means that the US dollar will become even more attractive to investors, which could come at the expense of commodities such as gold.

XAU/USD Fundamentals

Thursday (Dec. 31)

  • 13:30 US Unemployment Claims. Estimate 274K. Actual 287K
  • 14:45 US Chicago PMI. Estimate 50.4 points. Actual 42.9 points
  • 15:30 US Natural Gas Storage. Estimate -54B. Actual -58B

*Key Events are in Bold

*All release times are GMT

XAU/USD for Thursday, December 31, 2015

Forex Rate Graph 21/1/13

XAU/USD December 31 at 16:40 GMT

XAU/USD 1061.83 H: 1063 L: 1057

XAU/USD Technical

S3 S2 S1 R1 R2 R3
980 1024 1043 1080 1098 1134
  • There is resistance at 1080.
  • 1043 is providing support
  • Current range: 1043 to 1080

Further levels in both directions:

  • Below: 1043, 1024 and 980
  • Above: 1080, 1098, 1134 and 1151

OANDA’s Open Positions Ratio

In the XAU/USD ratio, long positions continue to command a solid majority (73%), indicative of strong trader bias towards gold prices 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.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.