XAU/USD – Gold Edges Higher, Markets Eye US GDP Report

Gold prices have edged upwards to start off the week. In Monday’s North American session, the spot price for one ounce of gold is $1191.09. There are no US releases on Monday. On Tuesday, the US will release Preliminary GDP for the third quarter, with the markets expecting a sharp gain of 3.0%. The other key indicator is CB Consumer Confidence, which is expected to improve to 101.3 points.

It’s been a dismal November for gold, which has declined 6.7% this month. The US dollar has been on a roll since the US elections and a December rate hike could result in further gains for the greenback at the expense of gold. The US economy continues to roll and consumer confidence has been an important factor, as higher confidence levels usually translate into increased consumer spending. Last week, UoM Consumer Sentiment jumped to 93.8 points, beating the forecast of 91.6 points. This reading was the indicator’s highest level since May. CB Consumer Confidence follows on Tuesday and is expected to follow suit with a higher reading for November.

The Federal Reserve appears poised to raise interest rates by a quarter-point in December, with the odds of a rate hike at 93 percent. The Fed minutes were released on Thursday, indicating that policymakers felt it appropriate to raise rates “relatively soon”. Earlier this month, Fed Chair Janet Yellen used the same phrase in her testimony before a congressional committee. The minutes indicated that some members argued that the Fed needs to raise rates in December in order to preserve the bank’s credibility – despite some broad hints of rate hikes during 2016, the Fed has stayed on the sidelines throughout 2016, causing significant disappointment and frustration in the markets.

 

XAU/USD Fundamentals

Monday (November 28)

  • There are no US releases on the schedule

Tuesday (November 29)

  • 8:30 US Preliminary GDP. Estimate 3.0%
  • 10:00 US CB Consumer Confidence. Estimate 101.3 points

XAU/USD for Monday, November 28, 2016

XAU/USD November 28 at 11:55 EST

Open: 1186.71 High: 1197.61 Low: 1183.01 Close: 1191.09

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1130 1146 1174 1205 1223 1245
  • XAU/USD posted gains in the Asian session. The pair has shown limited movement in the European and North American sessions
  • 1174 is a support line
  • There is resistance at 1205
  • Current range: 1174 to 1205

Further levels in both directions:

  • Below: 1174, 1146 and 1130
  • Above: 1205, 1223, 1245 and 1279

OANDA’s Open Positions Ratio

XAU/USD ratio is showing gains in short positions. Currently, long positions have a substantial majority (76%). This is indicative of trader bias towards XAU/USD reversing directions and moving to higher levels.

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.