Gold Takes Breather After Strong Gains

Gold prices is trading sideways in the Thursday session, after surging higher on Wednesday. Currently, the spot price for an ounce of gold is $1351.30, up 0.05% on the day. On the release front, PPI gained 0.4%, matching the forecast. Core PPI also gained 0.4%, beating the estimate of 0.2%. Both indicators rebounded after declines in the previous month. Unemployment Claims climbed to 230 thousand, just above the estimate of 229 thousand. Manufacturing data was mixed. The Empire State Manufacturing Index continues to slow down, and dropped to 13.1, missing the estimate of 17.7 points.The Philly Fed Manufacturing Index rose to 25.8, easily beating the estimate of 21.5 points. On Friday, the US releases key housing and consumer confidence numbers.

The US dollar has sagged against the major currencies, and gold has jumped on the bandwagon. On Thursday, gold jumped 1.6% on disappointing retail sales reports. Concerns of high inflation was a catalyst for the market sell-off last week, and fears of a resumption in the downward spiral are weighing on the dollar. If investors react negatively and ditch the markets yet again, safe-haven assets like gold will likely be the big winners. Gold prices were down in the first half of February, but gold has recovered these losses, after posting strong gains of 2.7% this week. US fundamentals remain solid, as the US economy is showing strong expansion, the labor market remains at capacity, and inflation levels are moving higher. This has led some analysts to attribute the recent sag in the US dollar to technical factors rather than fundamental reasons.

The new head of the Federal Reserve, Jerome Powell, received a rude welcome from the stock markets, as he started his new position last week. Powell sought to send a reassuring message on Tuesday, saying that the Fed is on alert to any risks to financial stability. However, it is clear that the Fed’s hand is limited when it comes to stock markets moves, and the volatility which we saw last week could resume at any time.Currently, the Fed is planning three hikes this year, but that could change to four or even five hikes, if inflation continues to head upwards and the robust US economy maintains its strong expansion.

 

XAU/USD Fundamentals

Thursday (February 15)

  • 8:30 US PPI. Estimate 0.4%. Actual 0.4%
  • 8:30 US Core PPI. Estimate 0.2%. Actual 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 17.7. Actual 13.1
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.5. Actual 25.8
  • 8:30 US Unemployment Claims. Estimate 229K. Actual 230K
  • 9:15 US Capacity Utilization Rate. Estimate 78.0%. Actual 77.5%
  • 9:15 US Industrial Production. Estimate +0.2%. Actual -0.1%
  • 10:00 US NAHB Housing Market Index. Estimate 72. Actual 72
  • 10:30 US Natural Gas Storage. Estimate -193B. Actual -194B
  • 16:00 US TIC Long-Term Purchases. Estimate 50.3B

Friday (February 16)

  • 8:30 US Building Permits. Estimate 1.29M
  • 8:30 US Housing Starts. Estimate 1.23M
  • 8:30 US Import Prices. Estimate 0.6%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 95.4

*All release times are EST

*Key events are in bold

 

XAU/USD for Thursday, February 15, 2018

XAU/USD February 15 at 12:15 EST

Open: 1350.66 High: 1357.19 Low: 1348.61 Close: 1351.30

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1285 1307 1337 1375 1416 1433
  • XAU/USD posted slight gains in the Asian session but retracted in European trade. The pair is showing limited movement in North American trade
  • 1337 is supporting support
  • 1375 is the next resistance line
  • Current range: 1337 to 1375

Further levels in both directions:

  • Below: 1337, 1307, 1285 and 1260
  • Above: 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing movement towards long position. Currently, long positions have a majority (55%), indicative of trader bias towards XAU/USD breaking out and moving higher.

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.

Gold Jumps as Strong CPI and Weak Retail Sales Spook Markets

Gold prices have posted strong gains in Wednesday’s North American session. Currently, the spot price for an ounce of gold is $1348.04, up 1.41% on the day. On the release front, January consumer inflation beat expectations. CPI jumped 0.5%, above the estimate of 0.3%. Core CPI remained steady at 0.3%, edging above the forecast of 0.2%. Consumer spending reports in January were dismal. Retail Sales was flat at 0.0%, short of the estimate of 0.5%. Core Retail Sales declined 0.3%, well off the forecast of +0.2%.

A strong CPI release for January has sent the US dollar lower against the major currencies, and gold has jumped on the bandwagon. Concerns of high inflation was a catalyst for the market sell-off last week, and fears of a resumption in the downward spiral are weighing on the dollar. If investors react negatively and ditch the markets yet again, safe-haven assets like gold will likely be the big winners. Gold prices were down in the first half of February, but gold has recovered these losses, after posting strong gains of 2.4% this week.

What about the Federal Reserve? Currently, the Fed is planning three hikes this year, but that could change to four or even five hikes, if inflation continues to head upwards and the robust US economy maintains its strong expansion.  The new head of the Federal Reserve, Jerome Powell, received a rude welcome from the stock markets, as he started his new position last week. Powell sought to send a reassuring message on Tuesday, saying that the Fed is on alert to any risks to financial stability. However, it is clear that the Fed’s hand is limited when it comes to stock markets moves, and the volatility which we saw last week could resume at any time.

XAU/USD Fundamentals

Wednesday (February 14)

  • 8:30 US CPI. Estimate 0.3%. Actual 0.5%
  • 8:30 US Core CPI. Estimate 0.2%. Actual 0.3%
  • 8:30 US Core Retail Sales. Estimate 0.5%. Actual 0.0%
  • 8:30 US Retail Sales. Estimate +0.2%. Actual -0.3%
  • 10:00 US Business Inventories. Estimate 0.3%. Actual 0.4%
  • 10:30 US Crude Oil Inventories. Estimate 2.8M. Actual 1.8M

Thursday (February 15)

  • 8:30 US PPI. Estimate 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 17.7
  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.5
  • 8:30 US Unemployment Claims. Estimate 229K
  • 10:00 US Business Inventories. Estimate 0.3%. Actual 0.4%.
  • 10:30 US Crude Oil Inventories. Estimate 2.8M. Actual 1.8M

*All release times are EST

*Key events are in bold

XAU/USD for Wednesday, February 14, 2018

XAU/USD February 14 at 12:25 EST

Open: 1329.36 High: 1349.44 Low: 1318.00 Close: 1348.04

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1285 1307 1337 1375 1416 1433
  • XAU/USD posted slight gains in the Asian session but gave up most of these gains in European trade. The pair has posted sharp gains in North American trade
  • 1337 has switched to support following strong gains by gold on Wednesday
  • 1375 is the next resistance line
  • Current range: 1337 to 1375

Further levels in both directions:

  • Below: 1337, 1307, 1285 and 1260
  • Above: 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Wednesday session. Currently, long and short positions are almost evenly split. This is indicative of a lack of trader bias as to what direction XAU/USD takes next.

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.

Gold Gains Ground as Weak Bonds Weigh on Dollar

Gold prices continue to move higher this week. In Tuesday’s North American trade, the spot price for an ounce of gold is $1326.90, up 0.32% on the day. There are no major events out of the US. On Wednesday, the US releases inflation and retail sales data. Traders should be prepared for some movement from XAU/USD during the North American session.

Gold headed lower last week, as the US dollar received a boost from a tumultuous week on global stock markets. Is the correction over? It’s too early too tell, but gold has posted gains in the Monday and Tuesday session, erasing most of last week’s losses. It’s no exaggeration to say that Wednesday’s inflation reports will be among the most important in recent memory, coming on the heels of the stock market meltdown. Much of the sell-off has been attributed to investor concerns over higher inflation, which could lead to a faster pace of rate hikes. If Wednesday’s inflation indicators are higher than expected, we can expect some volatility in gold prices and further sell-offs in the stock markets. The new head of the Federal Reserve, Jerome Powell, sought to send a reassuring message on Tuesday, saying that the Fed is on alert to any risks to financial stability. However, it’s clear that the Fed’s hand is limited when it comes to the volatile market movement which marked last week and could resume at any time.

 

XAU/USD Fundamentals

Tuesday (February 13)

  • 6:00 US NFIB Small Business Index. Estimate 106.2. Actual 106.9
  • 8:00 US FOMC Member Loretta Mester Speaks

Wednesday (February 14)

  • 8:30 US CPI. Estimate 0.3%
  • 8:30 US Core CPI. Estimate 0.2%
  • 8:30 US Core Retail Sales. Estimate 0.2%
  • 8:30 US Retail Sales. Estimate 0.5%

*All release times are EST

*Key events are in bold

 

XAU/USD for Tuesday, February 13, 2018

XAU/USD February 13 at 12:40 EST

Open: 1322.74 High: 1331.03 Low: 1321.68 Close: 1326.90

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD posted gains in the Asian session. The pair continued to move higher in European trade but retracted. The pair is steady is choppy in North American trade
  • 1307 is providing support
  • 1337 is the next resistance line
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing some movement toward long positions. Currently, long and short positions are almost evenly split. This is indicative of a lack of trader bias as to what direction XAU/USD takes next.

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.

XAU/USD – Gold Moves Higher Ahead of CPI

Gold prices have moved higher to start the week. In Monday’s North American trade, the spot price for an ounce of gold is $1324.83, up 0.63% on the day. It’s a quiet start to the week, with only one event. The US federal budget is expected to rebound and show a large surplus of $50.2 billion. The last time the federal government posted a surplus was in September.

 

Gold lost ground last week, as the US dollar received a boost from a tumultuous week on global stock markets. Is the correction over? It’s too early too tell, since much of the sell-off is related to investor concerns over possible interest rate hikes by major central banks. The Bank of England has said it could accelerate its pace of hikes, and the Federal Reserve could follow suit if inflation moves higher. Gold prices are closely linked to interest rate moves, and a change in the Fed’s projection of interest rate moves could have a sharp effect on gold. Currently, the Fed is projecting three rate hikes this year, but if inflation moves higher and the robust US economy continues its current expansion, the Fed may opt for four or even five rate hikes, and this would push gold to lower levels.

It’s a quiet start to the week in the US, and the US dollar has been generally subdued. That will likely change on Wednesday, with the release of inflation and retail sales reports. The markets will be glued to the inflation indicators, as last week’s stock market slide was triggered by concern that higher inflation would lead to additional rate hikes from the Federal Reserve and other central banks. If inflation numbers are higher than expected, we could see some volatility in gold prices and further sell-offs in the stock markets.

 

XAU/USD Fundamentals

Monday (February 12)

  • 14:00 US Federal Budget Balance. Estimate 50.2B

*All release times are GMT

*Key events are in bold

 

XAU/USD for Monday, February 12, 2018

XAU/USD February 12 at 12:20 EST

Open: 1314.73 High: 1326.24 Low: 1314.08 Close: 1324.83

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD posted gains in the Asian session but gave up most of these gains in European trade. The pair has posted gains in North American trade
  • 1307 is providing support
  • 1337 is the next resistance line
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing short positions with a majority (54%). This is indicative of trader bias towards XAU/USD reversing directions and moving lower.

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.