Gold Rebounds After Sharp Losses, US Consumer Confidence Shines

Gold has posted gains in the Tuesday session, recovering some of the losses from Monday. In the North American session, the spot price for an ounce of gold is $1331.42, up 0.48% on the day. In the US, CB Consumer Confidence jumped to 128.7, beating the estimate of 126.0 points. US New Home Sales also looked sharp, jumping to 694 thousand and crushing the estimate of 625 thousand. This marked a 4-month high. However, manufacturing data was not as strong, as Richmond Manufacturing Index dropped 3 points, well off the estimate of a 16-point gain. This was the first contraction since October 2016.

Gold started the trading week with considerable losses, as higher yields for 10-year US treasury bills pushed the dollar broadly higher. The yields rose to 2.99% on Monday and punched above the symbolic 3% level on Tuesday. With oil pushing above $70 a barrel, there are concerns that inflation will rise, which has pushed bond prices lower and yields upwards. The dollar has also benefitted from a reduction in geopolitical risk, with an easing of tensions between North and South Korea, and a lull in the conflict in Syria. Still, gold has reversed directions on Tuesday and gained back much of Monday’s losses.

The trade battle between China and the US has become a geopolitical hotspot, dominating the headlines and shaken global markets. After a series of tit-for-tat tariffs between the economic giants, there has been widespread concern that these moves could lead to a trade war which would slow down Chinese growth and trigger a global recession. However, US Treasury Secretary Steven Mnuchin sought to lower the rhetoric on the weekend, saying that he was considering a trip to China, adding he was “cautiously optimistic” that the two sides could resolve the trade dispute. The markets will be hoping for a truce between the sides, as any further tariffs are sure to spook investors, which would likely boost gold, a traditional safe-haven in times of crisis.

USD Back with a vengeance

US Yields Reach 3%

US Dollar Bulls Look for Support Signals

XAU/USD Fundamentals

 Tuesday (April 24)

  • 9:00 US HPI. Estimate 0.5%. Actual 0.6%
  • 9:00 US S&P/CS Composite-20 HPI. Estimate 6.3%. Actual 6.8%
  • 10:00 US CB Consumer Confidence. Estimate 126.0. Actual 128.7
  • 10:00 US New Home Sales. Estimate 625K. Actual 694K
  • 10:00 US Richmond Manufacturing Index. Estimate 16. Actual -3

*All release times are DST

*Key events are in bold

XAU/USD for Tuesday, April 24, 2018

XAU/USD April 24 at 12:50 DST

Open: 1324.85 High: 1331.70 Low: 1322.08 Close: 1331.42

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD posted small gains in the Asian session. The pair edged higher in European trade and has posted more gains in the North American session
  • 1307 is providing support
  • 1337 is the next resistance line
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing gains in long positions. Currently, long positions have a majority (57%), indicative of trader bias towards XAU/USD continuing to move upwards.  

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.