XAU/USD – Gold Edges Higher, Markets Eye Tax Reform

Gold has started the week with slight gains. In Monday’s North American trade, the spot price for an ounce of gold is $1278.37, up 0.23% on the day. On the release front, the only event is the Federal Budget Balance, with a deficit of $58.2 billion expected. On Tuesday, the US publishes Core CPI and CPI.

US consumer confidence levels remain high, but a key indicator lost ground in October. UoM Consumer Sentiment was unexpectedly soft on Friday, coming in at 97.8, missing the forecast of 100.8 points. Last week’s unemployment claims were a disappointment at 239 thousand, climbing to a 4-week high. Investor sentiment will not fall after one soft employment report, but there are some concerns with the US labor market. Nonfarm payrolls rebounded in October with a gain of 261 thousand, after a rare decline a month earlier. Still, this reading was well off the forecast of 312 thousand. Wage growth remains a problem, reflective of chronically low inflation. In October, Average Hourly Earnings posted a flat 0.0%, the first time wages have not increased since November 2016.

Investors are keeping close eye on developments with President Trump’s tax proposal. There are some differences in the House and Senate bills, with some Republicans opposed to eliminating federal deductions of state and local taxes. The Republicans hope to present Trump with a new tax code by the end of the year, but with Democrats putting up fierce resistance, it’s unclear whether the bill will have enough votes to get through Congress. If the proposal is successful, the resulting economic growth could lead to higher interest rates, which would hurt gold prices.

XAU/USD Fundamentals

Monday (November 13)

  • 14:00 US Federal Budget Balance. Estimate -58.2B

Tuesday (November 14)

  • 5:00 Fed Reserve Chair Janet Yellen Speaks
  • 8:30 US PPI. Estimate 0.1%
  • 8:30 US Core PPI. Estimate 0.2%

*All release times are GMT

*Key events are in bold

XAU/USD for Monday, November 13, 2017

XAU/USD November 13 at 12:20 EST

Open: 1275.41 High: 1279.90 Low: 1274.41 Close: 1278.37

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1213 1240 1260 1285 1307 1337
  • XAU/USD edged higher in the Asian session. The pair is showing little movement in the European and North American sessions
  • 1260 is providing support
  • 1285 is the next resistance line
  • Current range: 1260 to 1285

Further levels in both directions:

  • Below: 1260, 1240 and 1213
  • Above: 1285, 1307, 1337 and 1367

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Monday session. Currently, long positions have a majority (73%), indicative of trader bias towards XAU/USD continuing to move to higher ground.

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.