Gold Ticks Higher, Markets Digesting Powell Testimony

Gold has posted slight gains on the Tuesday session. In North American trade, the spot price for an ounce of gold is $1295.91, up 0.12% on the day. In the US, CB Consumer Confidence jumped to 129.5, crushing the estimate of 123.9 points. In Washington, Fed Chair Designate Jerome Powell testified at his confirmation hearing before the Senate Banking Committee.

The markets were listening closely, as Jerome Powell testified before a senate committee. Powell said that he favored tailoring regulations for small banks, leaving the toughest regulations for the big players. Powell was cautious and diplomatic during the hearing, saying that the case is building for a December rate hike, and refused to express an opinion on the Trump tax bill. He will replace Janet Yellen in February, and is widely expected to continue Yellen’s monetary stance of small, gradual rate hikes.

Powell inherits an economy that is in excellent shape, but persistently low inflation remains a nagging problem. Fed policymakers have differing views on what to do about inflation, with some members proposing that the Fed drop its 2 percent target, in favor of a “gradually rising path” for prices. The Fed remains confounded by low inflation and wage growth, despite a labor market that is at full capacity. Still, the Fed will likely pull the rate trigger next month, and could raise rates up to 3 more times in 2018 if the economy continues to expand at its current pace.

 

XAU/USD Fundamentals

Tuesday (November 28)

  • 10:00 US CB Consumer Confidence. Estimate 123.9. Actual 129.5
  • 10:00 Fed Chair Designate Jerome Powell Speaks
  • 15:45 US Treasury Secretary Steven Mnuchin Speaks

Wednesday (November 29)

  • 8:30 US Preliminary GDP. Estimate 3.3%
  • 10:00 US Fed Chair Janet Yellen Testifies
  • 10:00 US Pending Home Sales. Estimate 1.1%

*All release times are GMT

*Key events are in bold

 

XAU/USD for Tuesday, November 28, 2017

XAU/USD November 28 at 12:35 EST

Open: 1294.38 High: 1297.57 Low: 1290.71 Close: 1295.92

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1240 1260 1285 1307 1337 1367
  • XAU/USD ticked higher in the Asian session and posted considerable gains in European trade. The pair is steady in North American trade
  • 1285 is a weak support line
  • 1307 is the next resistance line
  • Current range: 1285 to 1307

Further levels in both directions:

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

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Tuesday session. Currently, long positions have a majority (65%), indicative of trader bias towards XAU/USD continuing to moving 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.