Gold is trading quietly on Monday, with a spot price of $1267.26 per ounce in the North American session. On the release front, it’s a quiet start to the week, with two minor indicators on the schedule. The Labor Market Conditions Index came in at -2.4 points, its first decline since April 2015. Consumer Credit will be released later in the day.
Gold prices surged 3.1% last week, bolstered by a lukewarm US services sector report. US Nonfarm Payrolls surged to 242 thousand in January, much higher than the estimate of 195 thousand. This marked an impressive jump from the previous reading of 171 thousand. The US economy has added an average of 225,000 jobs per month since December, an impressive number considering that the economy has softened in the early part of 2016. Still, employment news was mixed, as wage growth declined by 0.1%, shy of the estimate of a 0.2% gain. This marked the first drop in wages since December 2014. This indicator is closely linked to inflation, since an increase in wages means workers have more money to spend. The indicator’s decline underscores that that Federal Reserve’s inflation target of about 2.0% remains far off, so the Fed, which is keeping a close eye on the weak inflation picture, is unlikely to raise rates trigger at its policy meeting later this month. This is good news for gold prices, as a rate increase would make the US dollar more attractive at the expense of gold.
XAU/USD Fundamentals
- 10:00 US Labor Market Conditions Index. Actual -2.4 points
- 13:00 US FOMC Member Lael Brainard Speaks
- 13:00 US FOMC Member Stanley Fischer Speaks
- 15:00 US Consumer Credit. Estimate 16.8B
*Key releases are highlighted in bold
*All release times are EST
XAU/USD for Monday, March 7, 2016
XAU/USD March 7 at 12:05 EST
Open: 1263.70 Low: 1256.71 High: 1273.20 Close: 1267.26
XAU/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1205 | 1232 | 1255 | 1279 | 1303 | 1337 |
- XAU/USD posted gains in the Asian and European sessions. The pair has leveled off in North American trade
- 1255 is providing support
- There is resistance at 1279
- Current range: 1255 to 1279
Further levels in both directions:
- Below: 1255, 1232, 1205 and 1191
- Above: 1279, 1303 and 1327
OANDA’s Open Positions Ratio
XAU/USD ratio has shown movement towards long positions, which currently have a majority (56%). This is indicative of trader bias towards gold continuing to move upwards.
