Gold Unmoved by Soft US Jobless Data

Gold is showing little movement on Thursday. In the North American session, gold is trading at $1247 per ounce. On the release front,  US unemployment claims jumped to 258 thousand, well above the forecast of 240 thousand. There was better news from New Home Sales, which improved to 592 thousand, easily beating the estimate of 566 thousand. On Friday, the US releases orders for durable goods.

Gold prices are sensitive to rate moves, so investors continue to look for clues about what the Federal Reserve has planned for the remainder of 2017. The Fed’s rate statement and dot plot indicated that the Fed is looking at another two hikes in 2017, which would make three in total. This forecast was reiterated by Chicago Fed President Charles Evans earlier this week. Although one could make a strong case that three rate hikes in 2017 would be impressive, the markets appear disappointed, and would like four hikes, given the strong performance of the US economy. The Fed’s cautious approach has disappointed the markets, and this negative sentiment has sent the US dollar sharply lower against gold. The CME Group has priced in a May hike at just 6% while a hike in June is currently priced in at 50%. Gold prices have also benefited from market jitters over President Trump, who has failed to present an economic policy, despite being in office for two months. This has reduced investors’ appetite for risk, which has been good news for gold, a safe-haven asset.

XAU/USD Fundamentals

Thursday (March 23)

• 8:30 US Unemployment Claims. Estimate 240K. Actual 258K
• 8:45 US Fed Chair Janet Yellen Speech
• 10:00 US New Home Sales. Estimate 566K. Actual 592K
• 10:30 US Natural Gas Storage. Estimate -147B. Actual -150B
• 12:30 US FOMC Member Neel Kashkari Speech
• 19:00 US FOMC Member Robert Kaplan Speech

Upcoming Key Events

Friday (March 24)

• 8:30 US Core Durable Goods Orders. Estimate 0.5%

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, March 23, 2017

XAU/USD March 23 at 13:45 EST

Open: 1246.03 High: 1253.30 Low: 1242.72 Close: 1247.12

XAU/USD Technical

• XAU/USD was flat in the Asian session. The pair edged higher in the European session but has retracted in North American trade
• 1232 is providing support
• 1260 is the next resistance line
• Current range: 1232 to 1260

Further levels in both directions:

• Below: 1232, 1199, 1174 and 1146
• Above: 1260, 1285 and 1307

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Thursday session. Currently, long positions have a majority (61%). This is indicative of trader bias towards XAU/USD breaking out and moving higher.

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