Gold Steady as Final GDP Edges Above Forecast

Gold has posted slight gains on Thursday. In North American trade, the spot price for an ounce of gold is $1285.21, up 0.27% on the day. Gold prices have steadied, but are still 1.0% lower this week. On the release front, key indicators were mixed. GDP expanded 3.1%, beating the forecast of 3.0%. Unemployment claims jumped to 272 thousand, higher than the estimate of 269 thousand. On Friday, the US releases Personal Spending and UoM Consumer Sentiment.

The US economy continues to perform well, as Final GDP for the second quarter posted an impressive gain of 3.1%. This figure was revised upwards from the second estimate of 3.0% in August. However, September and third quarter economic numbers could soften, due to the damage caused by hurricanes Harvey and Irma, which caused a slowdown in economic activity. The recent hurricanes have impacted on the labor market, pushing unemployment numbers higher. Still, the labor market remains strong, as underscored by unemployment rolls which have remained below the 300,000 level.

President Trump has all but given up on his health care proposals, as the plan lacks enough support from Republican lawmakers. Trump has now set his sights on tax reform, another key campaign promise. On Wednesday, Trump proposed a major overhaul of the US tax code, which includes reducing the corporate tax rate from 40 percent to 20 percent, as well as a 25 percent tax rate for small businesses, such as partnerships. Like other Trump proposals, the tax plan was sketchy on details, including how the tax plan would be paid for. With Democrats and some Republicans wary of Trump’s tax agenda, it’s likely his that tax reform proposal will face a stiff battle in Congress.

Trump Tax Plan Sends Dollar, Bond Yields Higher

XAU/USD Fundamentals

Thursday (September 28)

• 8:30 US Final GDP. Estimate 3.0%. Actual 3.1%
• 8:30 US Unemployment Claims. Estimate 269K. Actual 272K
• 8:30 US Final GDP Price Index. Estimate 1.0%. Actual 1.0%
• 8:30 US Goods Trade Balance. Estimate -65.0B. Actual -62.9B
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.4%. Actual 1.0%
• 10:15 US FOMC Member Stanley Fischer Speaks
• 10:30 US Natural Gas Storage. Estimate 77B. Actual 58B
• 19:01 British GfK Consumer Confidence. Estimate -11

Friday (September 29)

• 8:30 US Personal Spending. Estimate 0.1%
• 10:00 US Revised UoM Consumer Sentiment. Estimate 95.3

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, September 28, 2017

XAU/USD September 28 at 12:20 EST

Open: 1281.70 High: 1286.16 Low: 1277.64 Close: 1285.21

XAU/USD Technical

• XAU/USD posted slight losses in the Asian session but recovered these losses in European trade. The pair is flat in North American trade
• 1285 was tested earlier in support and is under pressure
• 1307 is the next resistance line
• Current range: 1285 to 1307

Further levels in both directions:

• Below: 1285, 1260 and 1240
• Above: 1307, 1337, 1367 and 1392

OANDA’s Open Positions Ratio

XAU/USD continues to show slight movement towards long positions. Currently, long positions have a majority (60%), indicative of trader bias towards XAU/USD continuing to higher ground. 

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