Gold slightly lower after U.S jobless claims drop

Gold has posted slight gains in the Thursday session. In North American trade, the spot price for one ounce of gold is $1243.07, down 0.20% on the day. In economic news, unemployment claims dropped sharply to 206 thousand, well below the estimate of 226 thousand. On Friday, the U.S. releases retail sales reports, with the markets braced for a sharp drop in the November readings. Retail sales is expected to fall to 0.1% and core retail sales is forecast to drop to 0.2%.

In the U.S, CPI dropped to 0.0% in November, down from 0.3% a month earlier. This marked the lowest level since May. Core CPI remained pegged at 0.2 percent. The weak readings can be attributed to falling oil prices, which has led to a sharp decline in gasoline prices. On an annualized basis, inflation gained 2.2 percent in November, down from 2.5 percent in October. With the U.S. economy showing signs of slowing down, and the global trade war taking a bite out of the global economy, inflation could continue to head lower as we head into 2019. This has led to a reassessment at the Federal Reserve of monetary policy. Earlier in the year, the Fed was sending messages that it would raise rates three or four times next year. This has been drastically scaled back, with some analysts predicting only one rate hike in 2019.

Although the U.S. and China remain embroiled in a nasty trade war, the two sides are at least talking, with substantial negotiations expected to start shortly. China’s economy has been weakened by the trade war, raising hopes that the Chinese will be more flexible in trade talks with the United States. However, the arrest of a senior executive of a Chinese technology company in Vancouver and the angry Chinese response is the latest obstacle which could put a cloud over the talks.

ECB temporarily steals the spotlight

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XAU/USD Fundamentals

Thursday (December 13)

• 8:30 US Unemployment Claims. Estimate 226K. Actual 206K
• 8:30 US Import Prices. Estimate -1.0%. Estimate -1.6%
• 10:30 US Natural Gas Storage. Estimate -81B. Actual -77B
• 13:01 US 30-year Bond Auction
• 14:00 US Federal Budget Balance. Estimate -193.5B

Friday (December 14)

• 8:30 US Core Retail Sales. Estimate 0.2%
• 8:30 US Retail Sales. Estimate 0.1%

*All release times are EST

*Key events are in bold

XAU/USD for Thursday, December 14, 2018

XAU/USD December 14 at 12:20 EST

Open: 1245.76 High: 1246.83 Low: 1240.18 Close: 1243.07

XAU/USD Technical

XAU/USD showed little movement in the Asian session and edged lower in European trade. XAU/USD is almost unchanged in North American trade

• 1236 is providing support
• 1261 is the next resistance line
• Current range: 1236 to 1261

Further levels in both directions:

• Below: 1236, 1220, 1204 and 1170
• Above: 1261, 1284 and 1306

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.