Gold prices remained fairly steady after the ECB’s quantitative easing announcement on Thursday, and the metal remains calm in Friday trade. In the European session, the spot price stands at $1295.31 per ounce. On the release front, today’s highlight is US Existing Home Sales. The markets are expecting a jump in the December report, with an estimate of 5.08 million.
The markets had expected the ECB to pull the QE trigger on Thursday, but Mario Draghi has often underwhelmed in his monetary moves, so a QE package worth €1 trillion sent the euro reeling against the US dollar. The QE scheme will see the ECB purchase €60 billion each month, commencing in March and scheduled to last until late 2016. The ECB has been under increasing pressure to combat deflation in the Eurozone, as underscored by a December reading of -0.2%. In remarks on Thursday, Draghi acknowledged that ECB efforts to fight deflation had been insufficient. Thursday’s dramatic move demonstrates a strong determination by the ECB to “take the bull by its horns” in the battle to bolster inflation and kick-start the ailing Eurozone economy.
XAU/USD for Friday, January 23, 2015
XAU/USD January 23 at 11:30 GMT
XAU/USD 1295.31 H: 1301.87 L: 1292.60
XAU/USD Technicals:
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1240 | 1255 | 1275 | 1300 | 1322 | 1345 |
- XAU/USD has shown limited movement in the Asian and European sessions.
- 1275 is an immediate support line.
- On the upside, 1300 is under strong pressure. Will the pair break through during the day? 1322 is stronger.
- Current range: 1275 to 1300
Further levels in both directions:
- Below: 1275, 1255, 1240, 1215 and 1200
- Above: 1300, 1322, 1345 and 1375
OANDA’s Open Positions Ratio
XAU/USD ratio is pointing to gains in short positions on Friday. This is consistent with the pair’s movement, as gold has posted slight losses. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.
XAU/USD Fundamentals:
- 14:45 US Flash Manufacturing PMI. Estimate 54.1 points.
- 15:00 US Existing Home Sales. Estimate 5.08M.
- 15:00 US CB Leading Index. Estimate 0.5%.