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Gold Steady as Durable Goods Orders, Jobless Claim Miss Expectations

Gold has edged lower in the Thursday session, after recording considerable losses on Tuesday. In North American trade, spot gold is trading at $1265.53 per ounce. On the release front, key indicators were dismal. Core Durable Goods, Unemployment Claims, and Pending Home Sales all missed their estimates. On Friday, the US will publish Advance GDP, which is expected to gain 1.3%. We’ll also get a look at UoM Consumer Sentiment.

One of President Trump’s most important campaign platforms was overhauling the US tax code. Trump finally announced his long-awaited tax plan on Wednesday. The proposal calls for sharp reductions for both individuals and corporations. The plan calls for three tax brackets for individuals – 10%, 25% and 35%. The corporate sector would also see significant tax relief, with the corporate tax rate dropping from 35% to 15%, and the tax on multinationals’ overseas profits lowered from 35% to 10%. However, any tax reform proposals from the White House will require a stamp of approval from Congress, so Trump’s proposal should be viewed as a blueprint that is a long way off from becoming law. Trump’s proposal was short on details, although government officials are praising it as one of the largest tax cuts and broadest overhauls of the tax system in history. There hasn’t been much reaction from the markets, with the dollar showing limited movement against gold and major currencies in Thursday trading.

Mnuchin and Cohn Present Trump Tax Proposal [1]

The French presidential election may be in the daily headlines, but gold prices have been generally steady this week. Voters will be back at the ballot boxes on Sunday, and the markets have priced in a victory by Emmanuel Macron over Marie Le Pen. A major reason for the market’s calmness is that opinion polls before the first round were fairly accurate, and correctly forecast that Macron would win 24% of the vote and Le Pen 22%, with both advancing to the May 7 runoff. The markets are thus relying on the polls for the second round, which show Macron with a comfortable lead of 60-40. Le Pen is a heavy underdog, compounded by the fact that some candidates from the first round as well as former President Francois Hollande have publicly called for voters to support Macron. Still, a strong showing by Le Pen on Sunday would show that her strident anti-EU stance has wide popularity, and this could sour investor sentiment and send gold prices higher. Bottom line? If Macron wins by a large margin on Sunday, gold is unlikely to show much movement.

XAU/USD Fundamentals

Thursday (April 27)

Friday (April 28)

*All release times are GMT

*Key events are in bold

XAU/USD for Thursday, April 27, 2017

XAU/USD April 27 at 12:30 EST

Open: 1267.50 High: 1268.43 Low: 1260.90 Close: 1265.53

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1199 1232 1260 1285 1307 1337

Further levels in both directions:

OANDA’s Open Positions Ratio

XAU/USD ratio has shown minimal movement this week. Currently, long positions have a majority (58%). This is indicative of trader bias towards XAU/USD reversing directions and 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.

Kenny Fisher

Kenny Fisher [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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