Gold Steady as ECB Maintains Rates

Gold prices have steadied on Thursday, following strong gains a day earlier, as the metal pushed above the key $1300 level. Late in the European session, the spot price stands at $1305.56 an ounce. In economic news, the ECB maintained is benchmark interest rate at 0.15%. We’ll hear from ECB President Mario Draghi later in the day as he hosts a press conference.

With the crisis in Ukraine continuing, gold gained ground on Wednesday, as the safe-haven metal benefitted from investor nervousness. Gold pushed above the $1300 line, climbing as high as $1309. The US has accused Russia of massing troops on its border with Ukraine, and tensions are high as the EU has slapped stronger sanctions on Russia, while Moscow has responded with counter-sanctions of its own. The crisis has taken an economic toll on the Eurozone, as German numbers are down, and the Bundesbank is expecting a decline in German GDP in the second quarter. Germany and Russia are major trading partners, and the euro could drop to lower levels if the Ukraine crisis continues.

On Tuesday, ISM Non-manufacturing PMI looked sharp, rising to 58.7 points last month. This easily beat the estimate of 56.6, and was the index’s best showing since February 2011. This follows a strong Manufacturing PMI reading last week, with the index climbing to 57.1 points, a three-year high. There was more positive news on Tuesday, as Factory Orders had an impressive July, gaining 1.1%. These solid numbers point to healthy expansion in the US manufacturing and services sectors, and have helped strengthen the dollar and keep gold prices below $1300.


XAU/USD for Thursday, August 7, 2014

XAU/USD August 7 at 12:00 GMT

XAU/USD 1305.56 H: 1308.57 L: 1302.05


XAU/USD Technical

S3 S2 S1 R1 R2 R3
1252 1275 1300 1315 1331 1345


  • XAU/USD has been stable in the Asian and European sessions, trading slightly above the 1300 level.
  • 1315 remains an immediate resistance line. 1331 is next.
  • 1300 has reverted to a support role as gold as moved to higher levels. 1275 is stronger.
  • Current range: 1300 to 1315.

Further levels in both directions:

  • Below: 1300, 1275, 1252 and 1240
  • Above: 1315, 1331, 1345 and 1361


OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to strong gains in short positions. This is consistent with the strong gains made by gold, which has led to long positions being covered, resulting in a larger percentage of open short positions. The ratio continues to have a substantial majority of long positions, indicative of trader bias towards gold continuing to move higher.


XAU/USD Fundamentals

  • 11:45 ECB Minimum Bid Rate. Estimate 0.15%. Actual 0.15%.
  • 12:30 ECB Press Conference.
  • 12:30 US Unemployment Claims. Estimate 305K.
  • 14:30 US Natural Gas Storage. Estimate 89B.
  • 19:00 US Consumer Credit. Estimate 18.3B.

*Key releases are highlighted in bold

*All release times are GMT

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.