XAU/USD – Gold unchanged as jobless claims within expectations

Gold is trading sideways in the Thursday session. In North American trade, the spot price for one ounce of gold is $1223.17, up 0.02% on the day. On the release front, key indicators beat their estimates. The Philly Fed Manufacturing Index dropped to 22.2, above the estimate of 19.7 points. On the employment front, jobless claims dropped to 210 thousand, just below the estimate of 211 thousand.

The markets were treated to a hawkish message from the Federal Reserve minutes. The minutes indicated that a majority of members want to continue raising interest rates until the U.S economy shows signs of slowing down. However, the duration of a tighter policy remains unclear, as the minutes noted that “there is considerable uncertainty surrounding all estimates of the neutral federal funds rate.” This would likely be around the 3 percent level, which will not be reached until the second half of 2019, as the Fed has indicated it will raise rates three times next year. At the September meeting, the Fed removed the phrase “the stance of monetary policy remains accommodative”, which was considered outdated, given the policy of steady rate hikes. As rates approach the “neutral rate”, we could see further changes in language at upcoming policy meetings.

XAU/USD Fundamentals

Thursday (October 18)

• 8:30 US Philly Fed Manufacturing Index. Estimate 19.7. Actual 22.2
• 8:30 US Unemployment Claims. Estimate 211K. Actual 210K
• 10:00 US CB Leading Index. Estimate 0.5%
• 10:30 US Natural Gas Storage. Estimate 85B
• 12:15 US FOMC Member Randal Quarles Speaks

*All release times are DST

*Key events are in bold

XAU/USD for Thursday, October 18, 2018

XAU/USD October 18 at 10:05 DST

Open: 1222.48 High: 1226.34 Low: 1218.74 Close: 1223.17

XAU/USD Technical

XAU/USD showed little movement in the Asian session. In European trade, the pair edged lower but then recovered. XAU/USD is steady in the North American trade

• 1220 was tested earlier in support
• 1236 is the next resistance line
• Current range: 1220 to 1236

Further levels in both directions:

• Below: 1220, 1204, 1170 and 1146
• Above: 1236, 1261 and 1284

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