Gold Steady, US Durables Disappoint

Gold is showing limited movement on Tuesday, as the precious metal continues to have an uneventful week. Early in the North American session, the spot price is $1162 per ounce. In economic news, US durables looked weak, as Core Durable Goods Orders declined 0.4%, while Durable Goods Orders came in at -1.2%. Later in the day, we’ll get a look at CB Consumer Confidence. The markets are expecting another strong release, with a forecast of 102.5 points.

US durables, which helps gauge the strength of the manufacturing sector, were dismal in the September reports. Core Durable Goods Orders fell 0.4%, compared to the forecast of 0.0%. It marked the indicator’s first decline in six months. There was no relief from Durable Goods Orders, which posted a sharp decline of 1.2%, although this was within expectations. This was the indicator’s second straight decline, and these weak figures underscore a weak manufacturing sector, which continues to be hampered by weak global demand for US goods.

Meanwhile, we’re getting mixed messages about the health of the US housing sector. Existing Housing Sales looked sharp last week, improving to 5.55 million, which was well above the estimate of 5.38 million. The news was much worse from New Home Sales on Monday, as the indicator slid to just 468 thousand, its lowest level in 10 months. The markets had expected a strong reading of 546 thousand.

It promises to be a busy week, as the Federal Reserve issues a policy statement on Wednesday. Any hints about a rate hike could spark a dollar buying spree. Will the Fed finally provide some clarity about its monetary plans? Such transparency and lack of communication from the Fed has been lacking and has been a source of frustration for the markets, which continue to receive conflicting signals from Fed policymakers regarding the timing of a rate hike. On Thursday, the US releases a market-mover, Advance GDP for the fourth quarter. The markets are expecting a gain of 1.6%, compared to Final GDP in the third quarter of 3.9%.

XAU/USD Fundamentals

Tuesday (Oct. 27)

• 12:30 US Core Durable Goods Orders. Estimate 0.0%. Actual -0.4%
• 12:30 US Durable Goods Orders. Estimate -1.1%. Actual -1..2%
• 13:00 US S&P/CS Composite-20 HPI. Estimate 5.1%. Actual 5.1%
• 13:45 US Flash Services PMI. Estimate 55.3 points. Actual
• 14:00 US CB Consumer Confidence. Estimate 102.5 points
• 14:00 US Richmond Manufacturing Index. Estimate -3 points

Upcoming Events

Wednesday (Oct. 28)

• 18:00 FOMC Statement
• 18:00 Federal Funds Rate. Estimate <0.25%

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Tuesday, October 27, 2015

USD/CAD October 27 at 1:15 GMT

USD/CAD 1164 H: 1169 L: 1160

XAU/USD Technical

• XAU/USD has been uneventful in the Asian and European sessions.
• On the downside, 1162 was tested earlier and remains under strong pressure.
• 1180 is an immediate resistance line.
• Current range: 1162 to 1180

Further levels in both directions:

• Below: 1162, 1151 and 1134
• Above: 1180, 1192 and 1204

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged on Tuesday, as long positions have a slight majority (53%) , indicative of slight trader bias towards gold moving to higher levels.

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.