Gold has been heading south all week, and the downward trend has continued on Friday, as the metal broke through support at $1240. In the European session, the spot price stands at $1237.38 per ounce, the metal's lowest level since January. Taking a look at Friday's fundamental events, In the US, it's a busy day with the release of three major events -- Retail Sales, Core Retail Sales and UoM Consumer Sentiment.
US employment data disappointed on Thursday. Unemployment Claims rose to 315 thousand, the largest number of claims in 10 weeks. The reading was much higher than the estimate of 306 thousand. This follows soft numbers from JOLTS Job Openings and a dismal Nonfarm Payrolls last week. The troubling job numbers are unlikely to affect the Fed's plan to continue trimming QE next week, but a weak labor market could postpone plans to raise interest rates by mid-2015.
After months of fighting in eastern Ukraine between government forces and pro-Russian fighters, a week-long ceasefire appears to be holding, although some sporadic fighting has been reported. Russia has denied assisting the rebels, but both Ukraine and NATO have said that Russian forces are in Ukraine and have taken part in the fighting. The crisis has severely strained relations between the West and Russia, and trade between Europe and Russia has suffered as a result. On Thursday, European countries and the US slapped further sections on Russia, which they said would be cancelled if the ceasefire continues to hold.
XAU/USD September 12 at 10:05 GMT
- XAU/USD 1237.38 H: 1240.75 L:1232.18
XAU/USD Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1156 | 1186 | 1210 | 1240 | 1252 | 1275 |
- XAU/USD broke below support at 1240 early in the Asian session. The pair has traded quietly in the European session.
- On the downside, 1210 is an immediate support line. 1186 is stronger.
- 1240 has reverted to a resistance role after providing support since January. 1252 is the next resistance line.
- Current range: 1210 to 1240.
Further levels in both directions:
- Below: 1210, 1186, 1156 and 1111
- Above: 1240, 1252, 1275, 1300, and 1315
OANDA's Open Positions Ratio
XAU/USD ratio is pointing to gains in short positions on Friday, reversing the direction seen a day earlier. This is consistent with the movement we're seeing from the pair, as gold continues to lose ground. The ratio has a substantial majority of long positions, indicative of trader bias toward gold reversing its downward movement against the dollar.
XAU/USD Fundamentals
- 12:30 US Core Retail Sales. Estimate 0.2%.
- 12:30 US Retail Sales. Estimate 0.3%.
- 12:30 US Import Prices. Estimate -0.8%.
- 13:55 US Preliminary UoM Consumer Sentiment. Estimate 83.2 points.
- 13:55 US Preliminary UoM Inflation Expectations.
- 14:00 US Business Inventories. Estimate 0.5%.