XAU/USD – Gold Subdued, US Job Openings Jumps

Gold continues to have a quiet week, as major economic releases have been few and far between. In Wednesday’s North American session, the gold is trading at $1344.83. On the release front, employment numbers continued to impress, as JOLTS Jobs Openings improved to 5.62 million, easily beating expectations. Crude Oil Inventories was unexpectedly strong, posting a surplus of 1.1 million barrels. Thursday’s key event is Unemployment Claims.

US employment numbers impressed in July, led by a banner Nonfarm Payrolls report. The July indicator surprised the markets with a huge gain of 255 thousand, crushing the estimate of 180 thousand. This release follows the outstanding June reading of 280 thousand. US wage growth has been a soft spot in the robust labor market, but there was positive news as Average Hourly Earnings gained 0.3%, edging above the forecast of 0.2%. As well, Unemployment Claims remained steady at 4.9%. What will the Federal Reserve do with these numbers? Prior to the payrolls release, a September hike was virtually off the table, especially in light of the soft US GDP report in late July. The Fed has made no secret of the fact that any rate move will be data-dependent, and the stellar job numbers will force to Fed to give serious thought to a move in September. Employment and inflation releases in the next few weeks will be critical factors in determining if the Fed makes a move next month, or waits until December before revisiting the rate question. Gold prices move inversely to interest rate levels, so we can expect some movement from the metal as we approach the next Fed policy meeting.

XAU/USD Fundamentals

Wednesday (August 10)

• 10:00 US JOLTS Job Openings. Estimate 5.52M. Actual 5.62M
• 10:30 US Crude Oil Inventories. Estimate -1.3M. Actual +1.1M
• 13:01 US 10-year Bond Auction
• 14:00 US Federal Budget Balance. Estimate -119.0B

Thursday (August 11)

• 8:30 US Unemployment Claims. Estimate 272K

*Key releases are highlighted in bold

*All release times are EDT

XAU/USD for Wednesday, August 10, 2016

XAU/USD August 10 at 13:00 EDT

Open: 1341.78 High: 1357.30 Low: 1340.73 Close: 1344.83

XAU/USD Technical

• XAU/USD posted gains in the Asian session and was flat in the European session. The pair has posted losses in North American trade
• There is resistance at 1361
• 1331 is providing support
• Current range: 1331 to 1361

Further levels in both directions:

• Below: 1331, 1307 and 1279
• Above: 1361, 1388, 1416 and 1447

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged in the Wednesday session, consistent with the lack of significant movement from XAU/USD. Long positions have a majority (62%), indicative of trader bias towards XAU/USD breaking out and moving upwards. 

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.