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By Kenny Fisher

Gold prices dipped on Thursday, falling below the key $1300 level, as excellent readings from Unemployment Claims and the Philly Fed Manufacturing Index helped push down the precious metal. On Good Friday, gold is trading quietly, with a spot price of $1294.80. We can expect thin trading during the day, with no releases out of the US.

US releases ended the week on a high note, as employment and manufacturing numbers were strong. The all-important Unemployment Claims was up slightly to 304 thousand, but had no trouble beating the estimate of 316 thousand. With the Federal Reserve planning another trim to its QE program at the end of the month and speculation rising about a possible interest rate increase next year, every employment release is under the market microscope. Meanwhile, the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.

XAU/USD for Friday, April 18, 2014

Forex Rate Graph 21/1/13

XAU/USD April 18 at 9:45 GMT

XAU/USD 1294.80 H: 1294.80 L: 1292.80

XAU/USD Technical

S3S2S1R1R2R3
124112601273130013151330
  • XAU/USD is showing little movement in Friday trade.
  • 1273 is providing strong support. This line has remained intact since mid-February.
  • 1300, a key level, is the next resistance line. This is followed by stronger resistance at 1315.
  • Current range: 1273 to 1300

Further levels in both directions:

  • Below: 1273, 1260, 1241 and 1215
  • Above: 1300, 1315, 1355, 1388 and 1403

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions in Friday trade. This is not consistent with the pair’s current lack of movement. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving higher against the dollar.

Gold is steady on Friday trading, after dropping below the $1300 level a day earlier. There is little movement in thin holiday trading on Friday.

XAU/USD Fundamentals

  • There are no US releases on Friday.

*All release times are GMT

Source: Gold Slips After Strong U.S. Job, Manufacturing Data