Gold has recorded small gains on Monday, as the metal trades at a spot price of $1352.27 per ounce in the North American session. On the release front, ISM Manufacturing PMI came in at 52.6 points, short of expectations. As well, Construction Spending and Manufacturing Prices also missed their estimates.
Gold prices climbed 2.0 percent last week, buoyed by the Federal Reserve announcement and a weak GDP report. The Fed continued to hold the course on interest rates, maintaining levels at 0.25%. A September hike is possible, but the Fed will want to see stronger numbers before making a move. On Sunday, FOMC William Dudley, a close ally of Janet Yellen, said that the Brexit fallout posed a risk to the US economy and urged the Fed to proceed with caution before raising interest rates. The US will release wage growth and nonfarm payrolls later in the week, and these key employment numbers will be carefully monitored by the Fed as it mulls over a possible rate hike. If these releases do not meet expectations, the likelihood a move in September will sharply decrease. Preliminary GDP for the second quarter disappointed, as the markets had expected a strong gain of 2.6%, while the economy responded with a much smaller gain of 1.2%.
The week has started with some soft releases, helping gold to remain at the $1350 level. ISM Manufacturing PMI and Manufacturing Prices pointed to expansion but both missed their estimates. As well, Construction Prices disappointed with a drop of 0.6%, its fourth decline in the past five months. These figures point to continuing weakness in the manufacturing and construction sectors.
Sunday (July 31)
- 21:15 FOMC Member William Dudley Speaks
Monday (August 1)
- 9:45 US Final Manufacturing PMI. Estimate 52.9. Actual 52.9
- 10:00 ISM Manufacturing PMI. Estimate 53.1. Actual 52.6
- 10:00 US Construction Spending. Estimate 0.5%. Actual -0.6%
- 10:00 ISM Manufacturing Prices. Estimate 61.0. Actual 55.0
- Tentative – US Loan Officer Survey
*Key releases are highlighted in bold
*All release times are EDT
XAU/USD for Monday, August 1, 2016
XAU/USD August 1 at 12:30 EDT
Open: 1349.07 High: 1352.97 Low: 1346.22 Close: 1352.27
- XAU/USD showed limited movement throughout the Monday session
- 1331 is providing support
- There is resistance at 1361
- Current range: 1331 to 1361
Further levels in both directions:
- Below: 1331, 1307, 1279 and 1255
- Above: 1361, 1388 and 1416
OANDA’s Open Positions Ratio
In the XAU/USD ratio, long positions have a strong majority (63%), indicative of trader bias towards XAU/USD continuing to move upwards.
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