XAU/USD – Gold Edges Lower after Strong US Consumer Report

Gold has posted slight losses in the Monday session. In North American trade, the metal is trading at a spot price of $1274.17 per ounce. On the release front,  Personal Spending posted a gain of 0.5%, matching the forecast. Chicago PMI dipped to 50.6 points, well off the forecast of 54.1 points. On Tuesday, the US will publish ISM Manufacturing PMI, with an estimate of 51.8 points.

In the US, there was positive news from the consumer front on Monday, as Personal Spending rebounded with a 0.5% gain in September, after a flat reading of 0.0% in August. Gold responded to the reading with slight losses. This release comes on the heels of a disappointing consumer spending report on Friday, as UoM Consumer Sentiment fell to 87.2 points in October, below expectations and its lowest level since August 2015. Also on Friday, US Advance GDP jumped 2.9 percent in the third quarter, and the rosy number will be great news for Fed policymakers who want to raise rates in December. Currently, a hike is priced in at around 70 percent. The US economy remains strong, buoyed by a labor market that is close to capacity, with unemployment at a healthy 5.0%. Inflation levels, however, remain low and are unlikely to show much improvement in the next few months. Although the Fed would prefer stronger inflation, other economic indicators remain strong enough such that the lack of inflation is unlikely to be the critical factor in the Fed rate decision. The Fed will also hold a policy meeting in early November, but is unlikely to make any rate moves just before the US presidential election.

XAU/USD Fundamentals

Monday (October 31)

  • 8:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.1%
  • 8:30 US Personal Spending. Estimate 0.5%. Actual 0.5%
  • 8:30 US Personal Income. Estimate 0.3%. Actual 0.3%
  • 9:45 US Chicago PMI. Estimate 54.1. Actual 50.6
  • Tentative – US Loan Officer Survey

Tuesday (November 1)

  • 10:00 US ISM Manufacturing PMI. Estimate 51.8

*All release times are EDT

*Key events are in bold

XAU/USD for Monday, October 31, 2016

XAU/USD October 31 at 14:00 EDT

Open: 1278.99 High: 1279.57 Low: 1271.21 Close: 1274.17

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1199 1223 1245 1279 1307 1331
  • XAU/USD was flat in the Asian session. The pair posted slight losses in the European session and has shown limited movement in North American trade
  • 1245 is providing support
  • There is resistance at 1279
  • Current range: 1245 to 1279

Further levels in both directions:

  • Below: 1245, 1223 and 1199
  • Above: 1279, 1307 and 1331

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing long positions with a substantial majority (74%), indicative of trader bias towards XAU/USD reversing directions and moving higher.

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.