Gold in Holding Pattern as Greece Bailout in Spotlight

Gold prices are unchanged on Wednesday, as the metal is trading at a spot price of $1233.52. It’s a quiet day on the release front, with no major US events on the schedule.

The markets remain focused on Greece, as the bailout crisis continues. After the new Greek government said it would not renew the EUR 240 billion bailout under the current terms, the ECB announced that it will no longer accept Greek government bonds as collateral for ECB loans as of February 11. Greece is proposing a new 10-step deal that removes the harsh austerity steps, which Greece has called “toxic”, required under the bailout. However, Germany and Greece’s international creditors do not want to rewrite the bailout agreement. On Wednesday, EU finance ministers are meeting in Brussels, with the Greek crisis on top of the agenda. If there are any major announcements out of Brussels on Wednesday, we could see some movement in the markets.

US employment numbers continue to impress, as JOLTS Jobs Openings climbed to 5.05 million, matching expectations. This was the indicator’s highest level since 2001, and points to more available jobs due to an increase in demand for goods and services. The strong reading follows a solid US Nonfarm Payrolls report for January, which was released on Friday. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so these strong employment releases reinforce expectations for an interest rate in mid-2015, which would be a major boost for the US dollar.

XAU/USD for Wednesday, February 11, 2015

XAU/USD February 11 at 10:30 GMT

XAU/USD 1233.52 H: 1238.75 L: 1233.39

XAU/USD Technical

• XAU/USD has shown little movement in the Asian and European sessions. The pair remains close to resistance at 1240.
• On the upside, 1240 remains under pressure. 1255 is stronger.
• 1215 is an immediate support level. 1200 is next.
• Current range: 1215 to 1240

Further levels in both directions:

• Below: 1215, 1200, 1175 and 1154
• Above: 1240, 1255, 1275, 1300 and 1322

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged on Wednesday. This is consistent with the lack of movement displayed by the pair. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

• 15:30 US Crude Oil Inventories. Estimate 3.7M.
• 18:01 US 10-year Bond Auction.
• 19:00 US Federal Budget Balance. Estimate -2.6B.

*Key releases are highlighted in bold

*All release times are GMT

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