Gold Flat At $1300 Ahead Of Key U.S. Data, Fed Statement

 |  Includes: GLD, UDN, UUP
by: Dean Popplewell

By Kenny Fisher

Gold is listless on Wednesday, as the metal hugs the $1300 line late in the European session. On the release front, it's a busy day, with three key events out of the US - Advance GDP, ADP Nonfarm Payrolls and the Federal Reserve Policy Statement. Many investors have remained on the sidelines so far this week, waiting for some market-moving data before making any moves.

Gold prices are sensitive to geopolitical events, and there are two current hotspots that could affect dramatically affect prices if the current situation deteriorates. In the Ukraine, tensions remain high after the downing of a Malaysian jetliner, and sporadic fighting continues between pro-Russian separatists and Ukrainian forces. European countries are expected to slap Russia with further sanctions. The second trouble spot is in Gaza, as fighting has raged between Hamas and Israel for over three weeks. The US has intensified efforts to halt the violence, but numerous ceasefires have been declared and broken and casualties continue to mount.

CB Consumer Confidence was outstanding on Tuesday, pointing to a sharp increase in June. The key indicator jumped to 90.9 points, crushing the estimate of 85.5 points. This was the indicator's highest level since September 2007. Consumer confidence is closely tracked by analysts since a confident consumer is likely to increase consumption, which is critical for economic growth.

XAU/USD for Wednesday, July 30, 2014

XAU/USD July 30 at 11:35 GMT

XAU/USD 1299.43 H: 1300.33 L: 1297.12

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1240 1252 1275 1300 1315 1331
Click to enlarge
  • XAU/USD has shown almost no movement in the Asian and European sessions.
  • On the upside, 1300 has been under strong pressure throughout the day. 1315 is next.
  • 1275 continues to provide support. 1252 follows.
  • Current range: 1275 to 1300.

Further levels in both directions:

  • Below: 1275, 1252, 1240 and 1208
  • Above: 1300, 1315, 1331 and 1345

OANDA's Open Positions Ratio

XAU/USD ratio is unchanged on Wednesday. This is consistent with the lack of movement displayed by the pair. The ratio has a majority of long positions, indicative of trader bias towards gold prices breaking out of range and moving upwards.

XAU/USD Fundamentals

  • 12:15 US ADP Nonfarm Employment Change. Estimate 234K.
  • 12:30 US Advance GDP. Estimate 3.1%.
  • 12:30 US Advance GDP Price Index. Estimate 1.8%.
  • 14:30 US Crude Oil Inventories. Estimate -0.5M.
  • 18:00 US FOMC Policy Statement.
  • 18:00 US Federal Funds Rate. <0.25%.

*Key releases are highlighted in bold

*All release times are GMT

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.