Gold Steady Against Dollar, Markets Await Construction Reports

Gold has ticked higher in the Monday session. Currently, spot gold is trading at $1229.85 in the North American session.  On the release front, the Empire State Manufacturing Index disappointed with a reading of -1.0, short of the forecast of 7.2 points. On Tuesday, construction numbers will be in focus, with the release of Building Permits and Housing Starts.

US numbers ended on the week on a mixed note, as consumer spending and inflation numbers fell short of estimates. CPI came in at 0.2%, short of the estimate of 0.3%. Core CPI, which excludes the most volatile items, posted a small gain of 0.1%, shy of the estimate of 0.2%. Retail Sales came in at 0.3%, compared to the forecast of 0.5%. Retail Sales rose 0.4%, short of the estimate of 0.6%. There was better news from consumer confidence, as the strong reading of 97.7 beat the forecast of 97.0 points. These numbers underscored a troubling trend where strong consumer confidence has failed to translate into increased consumer spending.

Donald Trump’s firing of FBI director James Comey has stunned lawmakers and set off a political firestorm in Washington. Trump has been accused of triggering a constitutional crisis and undermining the rule of law. Comey had been conducting an investigation into possible collusion between Trump and Russia during the presidential campaign, so predictably, Comey’s dismissal has raised suspicions that Trump is trying to impede the investigation by firing Comey. The crisis could heat up further, with calls in Congress to appoint an independent investigator into Trump’s connections with Russia. This latest political storm has yet to shake up the markets, but a prolonged crisis could paralyze Washington and delay Trump’s agenda of tax reform and increased fiscal spending.

XAU/USD Fundamentals

Monday (May 15)

• 8:30 US Empire State Manufacturing Index. Estimate 7.2. Actual -1.0
• 10:00 US NAHB Housing Market Index. Estimate 68. Actual 70
• 16:00 US TIC Long-Term Purchases. Estimate 68.3B

Tuesday (May 16)

• 8:30 US Building Permits. Estimate 1.27M
• 8:30 US Housing Starts. Estimate 1.26M

*All release times are EDT

*Key events are in bold

XAU/USD for Monday, May 15, 2017

XAU/USD May 15 at 13:45 EST

Open: 1228.03 High: 1237.20 Low: 1226.88 Close: 1229.85

XAU/USD Technical

• XAU/USD was flat in the Asian session. The pair posted slight gains in the European session but has retracted in North American trade
• 1199 is providing support
• 1232 is the next resistance line
• Current range: 1199 to 1232

Further levels in both directions:

• Below: 1199, 1175 and 1146
• Above: 1232, 1260, 1285 and 1307

OANDA’s Open Positions Ratio

XAU/USD ratio has reversed directions and is showing slight movement towards long positions. Currently, long positions have a strong majority (73%), indicative of trader bias towards XAU/USD continuing to climb higher. 

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