Gold has posted sharp losses in the Thursday session, continuing the downward trend seen on Wednesday. In North American trade, the spot price for one ounce of gold is $1184.02, down 0.88% on the day. On the release front, Final GDP in Q2 matched the estimate, with a gain of 4.2%. Core durable goods orders jumped 4.5%, crushing the estimate of 1.9%. However, durable goods orders came in at 0.1%, missing the forecast of 0.4%. On Friday, the U.S will publish Personal Spending and UoM Consumer Sentiment.
There were no surprises from the Federal Reserve, which hiked rates for the third time this year, raising the benchmark rate by a quarter-point, to a range of 2 percent to 2.25 percent. The Fed intends to continue gradually raising rates, with another rate hike expected in December and three hikes in 2019. What was of more interest to investors was the rate statement, in which the Fed removed the word ‘accommodative’ in the statement, which means that the Fed now considers monetary policy to be neutral. Fed Chair Jerome Powell, in a bid to keep markets calm, stated in a follow-up press conference that removing accommodative language in the statement did not reflect a change in policy. Still, the markets were upbeat after the Fed meeting and the U.S dollar has responded with broad gains on Thursday.
Although the markets had priced in a rate hike from the Fed, the move nonetheless boosted the U.S dollar and sent gold prices sharply lower. The Fed indicated that it plans another hike in December and three more in 2019, which is bullish news for the U.S dollar. Gold has responded with sharp losses and earlier on Thursday dropped to $1181, its lowest level since mid-August. A strong Final GDP report for Q2 has also boosted risk appetite and dampened sentiment for gold. If key consumer data on Friday is strong, the dollar rally could continue.
Thursday (September 27)
- 8:30 US Core Durable Goods Orders. Estimate 0.4%. Actual 0.1%
- 8:30 US Final GDP. Estimate 4.2%. Actual 4.2%
- 8:30 US Durable Goods Orders. Estimate 1.9%. Actual 4.5%
- 8:30 US Final GDP Price Index. Estimate 3.0%. Actual 3.0%
- 8:30 US Goods Trade Balance. Estimate -70.6B. Actual -75.8B
- 8:30 US Preliminary Wholesale Inventories. Estimate 0.3%. Actual 0.8%
- 8:30 US Unemployment Claims. Estimate 208K. Actual 214K
- 10:00 US Pending Home Sales. Estimate -0.2%
- 10:30 US Natural Gas Storage. Estimate 64B
- 16:30 US Fed Chair Powell Speaks
Friday (September 28)
- 8:30 US Personal Spending. Estimate 0.3%
- 10:00 US Revised UoM Consumer Sentiment. Estimate 100.5
*All release times are DST
*Key events are in bold
XAU/USD for Thursday, September 27, 2018
XAU/USD September 27 at 12:20 DST
Open: 1194.52 High: 1198.65 Low: 1181.91 Close: 1184.02
XAU/USD edged higher the Asian session. The pair reversed directions and recorded sharp losses in European trade. The pair continues to lose ground in North American trade
- 1170 is providing support
- 1204 is the next resistance line
- Current range: 1170 to 1204
Further levels in both directions:
- Below: 1170, 1146 and 1115
- Above: 1204, 1220, 1236 and 1261
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