XAU/USD – Gold Moves Close to $1300 as North Korean Crisis Continues

Gold has posted gains on Tuesday, erasing most of the losses which marked the Monday session. In North American trade, gold is trading at $1289.78 per ounce. On the release front, US construction numbers were a mixed bag. Building Permits improved to 1.26 million, edging above the forecast of 1.25 million. Housing Starts dropped to 1.22 million, shy of the forecast of 1.25 million.

Geopolitical jitters continue to weigh on the markets, which has been good news for safe-haven gold. North Korea has been a flash-point in recent weeks, as the war of words between the US and North Korea has escalated, with North Korea warning it will respond with a nuclear strike if attacked by the US. The crisis has triggered strong movement towards gold, which has jumped 3.4% in April. On Tuesday, US vice-president Mike Pence, who is holding talks with Japanese leaders in Japan, said that the US is committed in its support of Japan and South Korea against aggression from North Korea. If the crisis with North Korea continues, gold prices could push higher and cross the symbolic $1300 level.

US March consumer indicators, released on Friday, were softer than expected. CPI declined 0.3%, and Core CPI dropped 0.1%, as both indicators missed their estimates. Consumer spending followed suit, as Retail Sales and Core Retail Sales also missed estimates with readings of 0.2% and 0.0%, respectively. Earlier in the week, UoM Consumer Sentiment improved to 98.0, beating expectations and hitting a 3-month high.What is unusual is this data is that consumer confidence levels improved in March, yet consumer spending declined. The US consumer behavior continues to be marked by a “hard/soft discrepancy”, as confidence levels (“soft data”), has not translated into actual spending numbers (“hard data”). The odds of a June rate hike from the Fed has fallen to 46%, down from 64% earlier in April. Janet Yellen & C0. will likely want to see stronger inflation numbers before pressing the rate trigger.

XAU/USD Fundamentals

Tuesday (April 18)

  • 8:30 US Building Permits. Estimate 1.25M. Actual 1.26M
  • 8:30 US Housing Starts. Estimate 1.25M. Actual 1.22M
  • 9:15 US Capacity Utilization Rate. Estimate 76.3%. Actual 76.1%
  • 9:15 US Industrial Production. Estimate 0.5%. Actual 0.5%

*All release times are GMT

*Key events are in bold

XAU/USD for Tuesday, April 18, 2017

XAU/USD April 18 at 13:00 EST

Open: 1282.97 High: 1291.66 Low: 1278.83 Close: 1289.78

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1232 1260 1285 1307 1337 1367
  • XAU/USD was flat in the Asian and European sessions. In North American trade, the pair has edged higher
  • 1285 is providing weak support
  • 1307 is the next resistance line
  • Current range: 1285 to 1307

Further levels in both directions:

  • Below: 1285, 1260, 1232 and 1199
  • Above: 1307, 1337 and 1367

OANDA’s Open Positions Ratio

In the Tuesday session, XAU/USD ratio is showing long positions with a slender majority (52%), indicative of slight trader bias towards XAU/USD continuing to move upwards. 

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.