XAU/USD – Gold jumps to 13-week high as global equity markets slip

Gold has recorded strong gains in the Tuesday session. In North American trade, the spot price for one ounce of gold is $1234.11, up 0.99% on the day. There are no key releases on the schedule. The Richmond Manufacturing Index dropped sharply to 15 in October, down from 29 points in September.

Global equity stock markets are seeing red on Tuesday, as geopolitical concerns and soft third-quarter earnings have dampened risk appetite. U.S markets are recording sharp losses, as poor earnings reports from industrial giants Caterpillar and 3M have pulled Wall Street lower. Investors are also nervous over weak Q3 growth in China and tensions between Saudi Arabia and the U.S over the death of a Saudi dissident in the Saudi consulate in Istanbul. Investors have responded by flocking to gold, a traditional safe-haven in times of crisis. We could see gold prices continue to fall in the North American session.

The trade war between the U.S and China continues to simmer, with the markets nervous that that trade tensions could escalate. The U.S Treasury Department released its semi-annual report on foreign exchange rates on Thursday, and there was some relief in the markets as the report did not name China as a currency manipulator. Still, the report said that the U.S was “deeply disappointed’ with that China refuses to disclose the extent of its foreign currency intervention. The Chinese yuan has slipped some 9 percent since April, and U.S officials are concerned that China has deliberately weakened the currency in order to counter U.S tariffs on Chinese goods, and will continue to monitor China’s currency practices.

 

XAU/USD Fundamentals

Tuesday (October 23)

  • 10:00 US Richmond Manufacturing Index. Estimate 25. Actual 15
  • 13:30 US FOMC Member Bostic Speaks

*All release times are DST

*Key events are in bold

 

XAU/USD for Tuesday, October 23, 2018

XAU/USD October 23 at 11:40 DST

Open: 1222.02 High: 1239.81 Low: 1221.82 Close: 1234.11

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1170 1204 1220 1236 1261 1284

XAU/USD edged higher in the Asian session. The pair posted sharp gains in European trade but has given up some of these gains in the North American session

  • 1220 was tested earlier in support. It is a weak line
  • 1236 is the next resistance line
  • Current range: 1220 to 1236

Further levels in both directions:

  • Below: 1220, 1204, 1170 and 1146
  • Above: 1236, 1261 and 1284

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.