XAU/USD – Gold Closing in on $1200 Level, US Jobless Claims Ahead

Gold continues to move higher and has posted gains in the Wednesday session. In North American trade, the spot price for one ounce is $1197.90. On the release front, there are no major US releases on the schedule. Crude Oil Inventories posted a gain of 4.1 million barrels, well above the estimate of 0.9 million. On Thursday, the US releases Unemployment Claims.

It’s been another good week for gold, which continues to point upwards. Gold prices have gained 1.8 percent this week and is currently trading at its highest levels since November 23. Will the positive trend continue? The incoming Trump administration is certain to shake things up in Washington, but it’s still unclear what economic policies Trump will actually implement. If the US economy continues to expand, the Fed might have to step in with further interest rates, which would likely hurt weaken gold prices. At the same time, the uncertainty surrounding Trump could lessen investor appetite and boost gold. With Trump taking over the presidency on January 20, traders should be prepared for some volatility in the coming weeks.

The US released a host of employment numbers on Friday. Although the numbers were mixed, the markets responded with a thumbs-up, boosting the US dollar and sending gold prices lower. Wages rebounded in December, as Average Hourly Earnings climbed 0.4%, edging above the estimate of 0.3%. This marked a strong turnaround after the November reading of -0.1%. The news was not as bright from Nonfarm Payrolls, which dropped to 156 thousand, well off the estimate of 175 thousand.

XAU/USD Fundamentals

Wednesday (January 11)

• 10:30 US Crude Oil Inventories. Estimate 0.9M. Actual 4.1M
• 11:00 President-Elect Donald Trump Speech
• 13:01 US 10-year Bond Auction
• 13:20 US FOMC Member William Dudley Speech

Thursday (January 12)

• 8:30 US Unemployment Claims. Estimate 266K

*All release times are EST

* Key events are in bold

XAU/USD for Wednesday, January 11, 2017

XAU/USD January 11 at 13:45 EST

Open: 1186.11 High: 1197.20 Low: 1177.16 Close: 1197.90

XAU/USD Technical

• XAU/USD was flat in the Asian and European sessions. The pair dropped lower in the North American session but has rebounded and posted gains
• 1174 is providing support
• 1199 is a weak resistance line. It could break in the North American session
• Current range: 1174 to 1199

Further levels in both directions:

• Below: 1174, 1146, 1130, and 1111
• Above: 1199 and 1232 and 1260

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged in the Wednesday session. Currently, long positions command a strong majority (76%). This is indicative of trader bias towards XAU/USD continuing to climb to higher levels.

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