Gold’s Losing Streak Continues, Markets Await ADP Nonfarm Payrolls

Gold continues to lose ground, as the metal trades at a spot price of $1117.85 per ounce in Wednesday’s European session. In the US, there are three key releases – ADP Nonfarm Payrolls, Trade Balance and ISM Non-Manufacturing PMI. On Thursday, we’ll get an additional look at employment data, with the release of Unemployment Claims.

Gold prices are under strong pressure, and have now fallen over 5 consecutive days. Gold was hammered by the ECB and the Federal Reserve in late October, sustaining sharp losses as a result of statements from the two central banks. In the case of the ECB, it was a broad hint of further easing that sent gold lower. Last week, gold prices slipped as the Federal Reserve surprised the markets, stating that a rate hike in December was very much on the table. Investors snapped up US dollars after the ECB and Fed announcements, ditching gold holdings in the process. With the markets once again focused on a possible rate hike, the gold tailspin could continue in November, as a rate hike would send the greenback sharply higher.

With the Federal Reserve statement behind us, there was much anticipation ahead of the US Advance GDP for the third quarter, which was released last week. As it turned out, this key event didn’t shake up the markets, as the reading of a 1.5% gain was almost identical to the forecast of 1.6%. Still, this figure was much lower than the Q2 Final GDP of 3.9%, pointing to a slowdown in the US economy. Meanwhile, Unemployment Claims beat the estimate for a fourth straight week, coming in at 260 thousand. The estimate stood at 264 thousand. Will the upcoming ADP Nonfarm Payrolls also beat the forecast? The markets are bracing for a reading of 183 thousand, much lower than last month’s figure of 200 thousand.

XAU/USD Fundamentals

Wednesday (Nov. 4)

• 10:30 FOMC Member Lael Brainard Speaks
• 13:15 US ADP Nonfarm Employment Change. Estimate 183K
• 13:30 US Trade Balance. Estimate -42.7B
• 14:45 US Final Services PMI. Estimate 54.6 points
• 15:00 Federal Reserve Chair Janet Yellen Testifies
• 15:00 ISM Non-Manufacturing PMI. Estimate 56.6 points
• 15:30 US Crude Oil Inventories. Estimate 2.5M
• 19:30 FOMC Member William Dudley Speaks

Upcoming Key Events

Thursday (Nov. 5)

• 13:30 US Unemployment Claims. Estimate 263K

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Wednesday, November 4, 2015

XAU/USD November 3 at 14:00 GMT

XAU/USD 1117 H: 1122 L: 1115

XAU/USD Technical

• XAU/USD has shown marginal movement in the Asian and European sessions.
• 1134 is a weak resistance line.
• 1098 is providing support.
• Current range: 1098 to 1134

Further levels in both directions:

• Below: 1098, 1080 and 1043
• Above: 1134, 1151, 1162 and 1180

OANDA’s Open Positions Ratio

XAU/USD ratio is showing movement towards long positions, which commands a strong majority (70%). This is indicative of strong trader bias towards gold moving to higher levels.

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.