Gold Steady as ISM Manufacturing PMI Meets Expectations

Gold has posted slight gains in the Monday session. In North American trade, gold is trading at $1252.81 per ounce. On the release front, there is just one major release on the schedule. ISM Manufacturing PMI dropped to 57.2, matching the forecast.

Donald Trump’s young presidency has been turbulent, with Trump’s controversial statements and actions making headlines almost daily. The battles with the media continue, an economic policy remains a mystery, and Trump suffered a major setback as he couldn’t even muster a vote over his healthcare bill. Despite these hiccups, the US economy hasn’t missed a beat in 2017. The CB consumer confidence report soared to 125.6 in March, and strong consumer confidence levels should translate into increased consumer spending. GDP for the fourth quarter was revised to 2.1%, up from 1.9% in the previous GDP report. This points to strong growth for the economy,

The discussions around the monetary policy tables are not whether the Fed will raise rates, but rather how many times will the Fed press the rate trigger in 2017. The Fed has forecast two more hikes this year, but the markets are looking for three hikes, and the US dollar took a hit last week as the markets were disappointed with the Fed’s dovish rate statement. The Fed will release the minutes of its March meeting on Wednesday, and the markets will be looking for clues as to the timing of a possible rate hike. If the minutes are dovish in tone, gold could head lower.

XAU/USD Fundamentals

Monday (April 3)

• 9:45 US Final Manufacturing PMI. Estimate 53.5. Actual 53.3
• 10:00 US ISM Manufacturing PMI. Estimate 57.2. Actual 57.2
• 10:00 US Construction Spending. Estimate 1.0%. Actual 0.8%
• 10:00 US ISM Manufacturing Prices. Estimate 68.5. Actual 70.5
• 10:30 US FOMC Member Esther Dudley Speech
• All Day – US Total Vehicles Sales. Estimate 17.4M

*All release times are GMT

*Key events are in bold

XAU/USD for Monday, April 3, 2017

XAU/USD April 3 at 11:35 EST

Open: 1248.20 High: 1253.74 Low: 1244.44 Close: 1252.81

XAU/USD Technical

• XAU/USD was flat in the Asian session. The pair edged lower in European trade but has reversed directions and posted gains in North American trade
• 1232 is providing support
• 1260 is the next resistance line
• Current range: 1232 to 1260

Further levels in both directions:

• Below: 1232, 1199, 1174 and 1146
• Above: 1260, 1285 and 1307

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing long positions with a majority (58%), indicative of trader bias towards XAU/USD continuing to move higher.

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