Spot Gold Prices Steady after French Election

Spot gold is unchanged in the Monday session. In North American trade, the price of one ounce gold is $1275.49. However, gold futures have lost ground as investors have dumped safe-haven assets following the first round of the French presidential election. On the release front, there are no economic indicators out of the US. On Tuesday, the US releases two key indicators – CB Consumer Confidence and New Home Sales.

Investors cheered the results of the French election on Sunday, which sent stock markets higher but weighed on gold futures. The first round featured 11 candidates, and the election whittled the field down to just 2 candidates – centrist Emmanuel Macron and far-right Marie Le Pen. Macron garnered 24% of the vote and Le Pen 22%, which was what most polls leading up to the election predicted. Investors breathed a sigh of relief, as the nightmarish scenario of a runoff between two extreme candidates, Marie Le Pen on the right and far-left candidate Jean-Luc Mélenchon, was averted. The runoff vote between Macron and Le Pen is slated for May 7, and French voters will have a clear choice between Macron, who served as an economic minister and is pro-business, and Le Pen, who is running on a populist, anti-EU platform.

Gold Lower as EUR Rises Post 1st Round French Elections

French Relief Sends Europe Soaring

French Election: Five Things We Have Learned

With the US economy performing well, despite some recent hiccups, the markets are expecting interest rates to continue rising in 2017. The Fed has broadly hinted that it will gradually raise rates this year, but it’s unclear how many times Janet Yellen will press the rate trigger. Most analysts are expecting two more moves this year, but there have been calls from some Fed policymakers for three more hikes. However, soft retail sales and CPI numbers in March are likely to make the Fed more dovish, and on Tuesday, the Atlanta and New York Federal Reserve lowered their outlook for US economic growth for the first quarter. The Fed can point to a labor market that is close to capacity as well as strong consumer confidence, but surprisingly, this has not translated into stronger consumer spending, a key driver of economic growth. The Fed is unlikely to make a move in May, but June is a strong possibility. However, the odds of a June move are showing a surprising amount of volatility, and the latest CME Group reading shows the likelihood of a quarter-point rise has dropped to 50 percent.

XAU/USD Fundamentals

Monday (April 24)

• 11:30 US FOMC Member Neel Kashkari Speech
• 15:15 US FOMC Member Neel Kashkari Speech

Tuesday (April 25)

• 10:00 US CB Consumer Confidence. Estimate 123.7
• 10:00 US New Home Sales. Estimate 590K

*All release times are GMT

*Key events are in bold

XAU/USD for Monday, April 24, 2017

XAU/USD April 24 at 13:25 EST

Open: 1274.36 High: 1277.47 Low: 1266.59 Close: 1275.49

XAU/USD Technical

• XAU/USD was mostly flat in the Asian session. The pair edged lower in European trade but has recovered in the North American session
• 1260 is providing support
• 1285 is the next resistance line
• Current range: 1260 to 1285

Further levels in both directions:

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

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing long positions with a majority (58%). This is indicative of trader bias towards XAU/USD breaking out and moving to higher levels. 

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