Gold Slide Continues after Strong Retail Sales and Manufacturing Reports

Gold has posted losses to start off the week. In North American trade, spot gold is trading at $1273.22, down 0.67% on the day. On the release front, US indicators enjoyed a solid day. Retail Sales came in at 0.6%, above the estimate of 0.3%. Core Retail Sales also looked sharp, with the gain of 0.5% beating the forecast of 0.3%. There was more positive news from the manufacturing sector, as the Empire State Manufacturing Index soared to 25.2, crushing the estimate of 10.1 points. On Wednesday, the US releases Building Permits and Housing Starts. As well, the FOMC publishes its minutes from the July FOMC meeting. If there are any hints from the Fed about a rate hike in December, the slide in gold prices could continue.

US consumer spending numbers in July beat their estimates, raising hopes that consumers will continue to spend and boost the US economy. The strong gains in retail sales has helped raise investor risk appetite, which took a hit last week over the crisis in the Korean peninsula. This has boosted the stock markets, but hurt gold prices. Last week, tensions soared between the two enemies, sending gold about 2.4%, as investors dumped shares and snapped up the safe-haven metal. Tensions between North Korea and the US remain high, but the prevalent sentiment in the markets is that a diplomatic solution will be found to end the crisis. President Trump has his hands full at home as well. The latest fiasco for Trump was the alt-right protest in Charlottesville on the weekend, where one protester was killed by a suspected white supremacist. Trump initially refused to condemn white supremacists for the violence, and faced a strong backlash of criticism from both Democrat and Republican lawmakers. Trump finally came out with a statement on Monday which condemned hate groups, including white supremacists.

 

XAU/USD Fundamentals

 

Tuesday (August 15)

  • 8:30 US Core Retail Sales. Estimate 0.3%. Actual 0.5%
  • 8:30 US Retail Sales. Estimate 0.3%. Actual 0.6%
  • 8:30 US Empire State Manufacturing Index. Estimate 10.1. Actual 25.2
  • 8:30 US Import Prices. Estimate 0.1%. Actual 0.1%
  • 10:00 US Business Inventories. Estimate 0.4%. Actual. 0.4%
  • 10:00 US NAHB Housing Market Index. Estimate 64. Actual 68
  • 14:00 US TIC Long-Term Purchases. Estimate 28.3B

Wednesday (August 16)

  • 8:30 US Building Permits. Estimate 1.25M
  • 8:30 US Housing Starts. Estimate 1.23M
  • 14:00 US FOMC Meeting Minutes

*All release times are EDT

*Key events are in bold

 

XAU/USD for Tuesday, August 15, 2017

XAU/USD August 15 at 12:15 EST

Open: 1281.85 High: 1282.18 Low: 1267.40 Close: 1273.17

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1199 1232 1260 1285 1307 1337
  • XAU/USD ticked lower in the Asian session. The pair posted losses in the European session but has partially recovered in North American trade
  • 1260 is providing support
  • 1285 is the next resistance line
  • Current range: 1260 to 1285

Further levels in both directions:

  • Below: 1260, 1232, 1199 and 1170
  • Above: 1285, 1307 and 1337

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Tuesday session. Currently, long positions have a majority (51%), indicative of a lack of trade bias as to what direction XAU/USD will take next.

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.