Gold Steady as Durable Goods Orders, Jobless Claim Miss Expectations

Gold has edged lower in the Thursday session, after recording considerable losses on Tuesday. In North American trade, spot gold is trading at $1265.53 per ounce. On the release front, key indicators were dismal. Core Durable Goods, Unemployment Claims, and Pending Home Sales all missed their estimates. On Friday, the US will publish Advance GDP, which is expected to gain 1.3%. We’ll also get a look at UoM Consumer Sentiment.

One of President Trump’s most important campaign platforms was overhauling the US tax code. Trump finally announced his long-awaited tax plan on Wednesday. The proposal calls for sharp reductions for both individuals and corporations. The plan calls for three tax brackets for individuals – 10%, 25% and 35%. The corporate sector would also see significant tax relief, with the corporate tax rate dropping from 35% to 15%, and the tax on multinationals’ overseas profits lowered from 35% to 10%. However, any tax reform proposals from the White House will require a stamp of approval from Congress, so Trump’s proposal should be viewed as a blueprint that is a long way off from becoming law. Trump’s proposal was short on details, although government officials are praising it as one of the largest tax cuts and broadest overhauls of the tax system in history. There hasn’t been much reaction from the markets, with the dollar showing limited movement against gold and major currencies in Thursday trading.

Mnuchin and Cohn Present Trump Tax Proposal

The French presidential election may be in the daily headlines, but gold prices have been generally steady this week. Voters will be back at the ballot boxes on Sunday, and the markets have priced in a victory by Emmanuel Macron over Marie Le Pen. A major reason for the market’s calmness is that opinion polls before the first round were fairly accurate, and correctly forecast that Macron would win 24% of the vote and Le Pen 22%, with both advancing to the May 7 runoff. The markets are thus relying on the polls for the second round, which show Macron with a comfortable lead of 60-40. Le Pen is a heavy underdog, compounded by the fact that some candidates from the first round as well as former President Francois Hollande have publicly called for voters to support Macron. Still, a strong showing by Le Pen on Sunday would show that her strident anti-EU stance has wide popularity, and this could sour investor sentiment and send gold prices higher. Bottom line? If Macron wins by a large margin on Sunday, gold is unlikely to show much movement.

XAU/USD Fundamentals

Thursday (April 27)

  • 8:30 US Core Durable Goods Orders. Estimate +0.4%. Actual -0.2%
  • 8:30 US Unemployment Claims. Estimate 241K. Actual 257K
  • 8:30 US Durable Goods Orders. Estimate 1.5%. Actual 0.7%
  • 8:30 US Goods Trade Balance. Estimate -65.2B. Actual -64.8B
  • 8:30 US Preliminary Wholesale Inventories. Estimate 0.3%. Actual -0.1%
  • 10:00 US Pending Home Sales. Estimate -0.6%. Actual -0.8%
  • 10:30 US Natural Gas Storage. Estimate 72B. Actual 74B

Friday (April 28)

  • 8:30 US Advance GDP. Estimate 1.3%
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 98.1

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, April 27, 2017

XAU/USD April 27 at 12:30 EST

Open: 1267.50 High: 1268.43 Low: 1260.90 Close: 1265.53

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1199 1232 1260 1285 1307 1337
  • XAU/USD was flat in the Asian session. The pair edged lower in European trade and has been choppy in the North American session
  • 1260 remains a weak support level
  • 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

XAU/USD ratio has shown minimal movement this week. Currently, long positions have a majority (58%). 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.