Gold is showing little movement in the Wednesday session. In North American trade, spot gold is trading at $1309.06, down 0.03% on the day. In economic news, Preliminary GDP posted a strong gain of 3.0%, beating the estimate of 2.7%. There was more positive news from the employment front, as ADP Nonfarm Payrolls jumped to 237 thousand, crushing the forecast of 185 thousand. On Thursday, the US releases unemployment claims.
US numbers looked sharp on Wednesday. Preliminary GDP (second estimate) for the second quarter was revised to 3.0%, a marked improvement from the first estimate of 2.6%. Consumer confidence and spending remain strong and helped contribute to the strong GDP report, as the economic expansion in Q2 was the strongest since the first quarter of 2015. However, solid consumer spending has failed to boost inflation, which continues to hover at low levels. The lack of inflation could hamper the Federal Reserve’s plans to raise interest rates, with the likelihood of a rate hike in December standing at just 35%. On the employment front, ADP Nonfarm Payrolls jumped to 237 thousand, marking a 3-month high. The official Nonfarm Payrolls report will be released on Friday, and if this indicator also beats the forecast, it would be a strong signal that the economic momentum has continued into the third quarter.
Gold is considered a safe-haven asset, and renewed tensions in the Korean peninsula earlier this week propelled the metal above the symbolic $1300 level. On Tuesday, North Korea fired a missile over Japanese territory, drawing sharp condemnations from Japan and the US, with President Trump declaring that “all options remain on the table”. However, tensions have since eased somewhat, restoring risk appetite and sending gold prices lower. Still, if North Korea decides to fire another missile towards Japan or the US military base on Guam, it is likely that gold prices will move higher.
Wednesday (August 30)
- 8:15 US ADP Nonfarm Employment Change. Estimate 186K. Actual 237K
- 8:30 US Preliminary GDP. Estimate 2.7%. Actual 3.0%
Thursday (August 31)
- 8:30 US Unemployment Claims. Estimate 237K
- 8:30 US Personal Spending. Estimate 0.4%
- 9:45 US Chicago PMI. Estimate 58.7
- 10:00 US Pending Home Sales. Estimate 0.4%
*All release times are GMT
*Key events are in bold
XAU/USD for Wednesday, August 30, 2017
XAU/USD August 30 at 12:15 EST
Open: 1309.55 High: 1313.78 Low: 1305.21 Close: 1309.06
- XAU/USD posted small gains in the Asian session. In European trade, the pair recorded small losses but then recovered. The pair has showed little movement in North American trade
- 1307 was tested earlier in support and is a weak line
- 1337 is the next resistance line
- Current range: 1307 to 1337
Further levels in both directions:
- Below: 1307, 1285, 1260 and 1232
- Above: 1337, 1367 and 1392
OANDA’s Open Positions Ratio
XAU/USD ratio is showing movement towards long positions. Currently, long positions have a majority (55%), indicative of slight trader bias towards XAU/USD breaking out and moving higher.