Gold in Holding Pattern Ahead of US Jobless Claims

Gold is unchanged on Thursday, as the metal trades at a spot price of $1084.94 in the European session. The metal continues to flirt close to lows not seen since April 2010, as broad gains by the US dollar in recent weeks has seen gold slide below the symbolic $1100 level. In economic news, the markets will be focused on employment numbers, as the US releases Unemployment Claims and JOLT Job Openings. Traders should be prepared for volatility on Friday, as the US releases Retail Sales, PPI and UoM Consumer Confidence.

After last week’s excellent Nonfarm Payroll, will we see an encore on Thursday? The markets will be looking for more good news, as the US releases Unemployment Claims and JOLT Job Openings. Unemployment Claims is 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.

The Fed policy statement was unexpectedly hawkish in October, and this has understandably fueled market speculation about a rate hike in December. At the same time, the Fed has been split over a rate hike for quite some time, 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 market players in the next several weeks regarding a possible move by the Fed.

XAU/USD Fundamentals

Thursday (Nov. 12)

• 13:30 US Unemployment Claims. Estimate 270K
• 14:30 US Federal Reserve Chair Janet Yellen Speaks
• 15:00 US JOLTS Openings. Estimate 5.39M
• 15:15 US FOMC Member Charles Evans Speaks
• 16:00 US Crude Oil Inventories. Estimate 0.8M
• 15:15 US FOMC Member William Dudley Speaks
• 18:01 US 30-year Bond Auction
• 19:00 US Federal Budget Balance. Estimate -130.2B
• 23:00 US FOMC Member Stanley Fischer Speaks

Upcoming Key Events

Friday (Nov. 13)

• 13:30 US Core Retail Sales. Estimate 0.4%
• 13:30 US PPI. Estimate 0.2%
• 13:30 US Retail Sales. Estimate 0.3%
• 15:00 US Preliminary UoM Consumer Sentiment. Estimate 91.3 points

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Thursday, November 12, 2015

XAU/USD November 12 at 12:30 GMT

XAU/USD 1084 H: 1089 L: 1086

XAU/USD Technical

• XAU/USD was up slightly in the Asian session but gave up these gains in the European session.
• 1080 is a weak support level and could be tested during the day.
• 1098 is an immediate 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 unchanged, reflective of a lack of movement from gold. Long positions have a strong majority (73%), 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.