Gold Listless as US Markets Off for Holiday

Gold is showing limited movement on Wednesday, as the metal trades at a spot price of $1088.71 in the European session. The metal remains mired in 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. In economic news, there are no economic releases out of the US, as the markets are closed for Veterans Day. On Thursday, we could see some movement from gold, as the US releases Unemployment Claims. As well, Federal Reserve head Janet Yellen speaks at event in Washington.

Gold posted sharp losses late last week, following the strong NFP reading, which crushed the estimate and increased the likelihood of a December rate hike by the Federal Reserve. Still, traders should keep in mind that the Fed has been split over a rate hike, and many members will be hesitant to vote in favor of raising rates unless they are confident that the US economy can withstand an interest rate hike. Employment numbers out of the US have certainly improved, with recent indicators such as the unemployment rate pointing to close to full employment in the US economy. At the same time, other indicators have not fared as well, particularly manufacturing data and inflation levels. While a rate hike in December is back on the front burner, it is by no means a done deal, making for plenty of speculation on the part of markets players in the next several weeks.

With the stellar performance by US Nonfarm Payrolls, the markets will be looking for more good news from US employment numbers. Strong job numbers not only point to a solid US economy, but will increase the likelihood of a rate increase in December, an event which would likely send the greenback to higher levels against its rivals. We’ll get a look at unemployment claims on Thursday, with the key indicator expected to drop to 270 thousand. Although last week’s reading of 276 thousand was higher than expected, the four-week indicator, which is less volatile than the weekly measurement, remains at its lowest level since December 1973. A strong reading from unemployment claims could bolster the US dollar.

XAU/USD Fundamentals

Wednesday (Nov. 11)

• There are no releases as markets are closed for Veterans Day

Upcoming Key Releases

Thursday (Nov. 12)

• 13:30 US Unemployment Claims. Estimate 270K
• 14:30 Federal Reserve Chair Janet Yellen Speaks

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Wednesday, November 11, 2015

XAU/USD November 11 at 12:15 GMT

XAU/USD 1088 H: 1094 L: 1087

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 pointing to movements in short positions. Long positions have a strong majority (74%), 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.