Gold Shows Limited Movement As Markets Eye US Housing, Durable Goods Data

Gold is showing little movement on Wednesday, as the spot price stands at $1223.62 per ounce in the European session. The metal showed some upward movement on Tuesday, touching a high of $1234 before retracting. Investors are on the sidelines, waiting for some key US numbers to help gauge the direction of the economy. The US releases New Housing Sales later in the day and durable goods data on Thursday, so some unexpected readings could lead to some movement from XAU/USD.

US Existing Home Sales didn’t impress in August, slipping to 5.05 million, compared to 5.15 million in the previous release. This was way off the estimate of 5.21 million. The indicator had exceeded the estimate in the past three releases, so the weak numbers disappointed the markets. The markets are hoping for better news from New Home Sales, which will be released later on Wednesday. The indicator has been struggling lately, with the past two readings missing expectations. The markets are expecting a stronger reading for August, with an estimate of 432 thousand.

The US economy may be much more robust than that of the Eurozone, but it is also grappling with weak inflation levels, as underscored by August releases. CPI, the primary gauge of consumer inflation, came in at -0.2%, its first decline since October. Core CPI followed suit with a flat reading of 0.0%. This was the first time the index failed to post a gain since October 2010. The weak numbers follow disappointing manufacturing inflation data. PPI, a key event, dipped to just 0.0%, a 3-month low. Core PPI also softened in August. Low inflation levels could delay the Federal Reserve’s plan to raise interest rates, which is widely expected to take place in the first half of 2015.

 

XAU/USD for Wednesday, September 24, 2014

XAU/USD September 24 at 8:25 GMT

XAU/USD 1223.62.06 H: 1225.81 L: 1220.35

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1156 1186 1210 1240 1252 1275

 

  • XAU/USD has been rangebound in the Asian and European sessions.
  • 1210 is an immediate support level. 1186 is stronger.
  • 1240 is the next resistance line. This is followed by resistance at 1252.
  • Current range: 1210 to 1240.

Further levels in both directions:

  • Below: 1210, 1186, 1156 and 1111
  • Above: 1240, 1252, 1275 and 1300

 

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged on Wednesday. This is consistent with the pair’s lack of movement. The ratio has a substantial majority of long positions, indicative of trader bias towards gold breaking out of range and moving higher.

 

XAU/USD Fundamentals

  • 14:00 US New Home Sales. Estimate 432K.
  • 14:30 US Crude Oil Inventories. Estimate 0.7M.
  • 16:05 US FOMC Member Loretta Mester Speaks.

*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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.