Gold Trading Quietly Close to $1090

Gold is unchanged on Tuesday, as the metal trades at a spot price of $1093.25 in the European session. There are no major releases out of the US for a second straight day, as traders continue to search for cues which can affect gold prices. Gold prices have plunged in the past two weeks, losing over 6 percent of its value. The metal is hovering at lows not seen since April 2010, as broad gains by the US dollar in recent weeks has seen gold slip below the symbolic $1100 level.

US employment numbers have looked good in recent readings, but the outstanding Nonfarm Payroll report on Friday surprised the markets. The key indicator jumped to 271 thousand, crushing the forecast of 181 thousand. It was the indicator’s best showing since May. As well, hourly wages were up 0.4%, bringing the annual increase to 2.5%, and the unemployment rate dipped to 5.0%. These excellent readings are further signs that the US economy is close to full employment. The positive news continued on Monday, as the Labor Market Conditions Index gained 1.6 points in October, up from a flat reading of 0.0 points a month earlier.

The Federal Reserve said in its October policy statement that employment data would be an important factor in a rate decision, and the strong NFP reading on Friday has greatly increased the likelihood of a Fed hike. The US dollar posted broad gains as a result, and gold prices took a hit. Still, a Fed rate hike should not be considered a done deal, as not all US releases have been as strong as employment data, such as manufacturing and inflation numbers. Low inflation points to slack in the economy, and the Fed policymakers will need to be assured that the US economy can withstand an interest rate hike before voting in favor of raising rates.

XAU/USD Fundamentals

Tuesday (Nov. 10)

• 11:00 NFIB Small Business Index. Estimate 96.4 points
• 13:30 US Import Prices. Estimate -0.1%
• 15:00 US Wholesale Inventories. Estimate 0.0%
• 18:01 US 10-year Bond Auction
• 19:30 US FOMC Member Charles Evans Speaks

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Tuesday, November 10, 2015

XAU/USD November 10 at 11:55 GMT

XAU/USD 1093 H: 1095 L: 1089

XAU/USD Technical

• XAU/USD has shown marginal movement in the Asian and European sessions.
• 1080 is an immediate support level.
• 1098 is a weak resistance line.
• Current range: 1080 to 1098

Further levels in both directions:

• Below: 1080, 1043 and 1024
• Above: 1098, 1134, 1151 and 1162

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged, consistent with the lack of movement shown by the pair on Tuesday. Long positions have a strong majority (80%), indicative of trader bias towards gold prices 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.