Gold stems slide, investors eye CPI reports

After seven losing sessions, gold has finally rebounded on Tuesday and posted gains. In North American trade, the spot price for one ounce of gold is $1203.75, up 0.26% on the day. On the release front, there are no major releases out of the U.S. for a second straight day.

Gold prices remain under pressure. The base metal declined 1.9 percent last week, and is in red territory this week as well. Global stock markets have lost ground, as trouble spots such as U.S-China relations, Brexit and the Italian budget crisis have unnerved investors, but gold has failed to take advantage. As well, last week’s hawkish Fed rate statement has boosted the U.S dollar and conversely weighed on gold prices, as investors have snapped up U.S dollars. With key consumer inflation and spending reports coming up, on Wednesday and Thursday, traders should be prepared for some volatility from gold prices.

The Fed shows no signs of easing up on interest rate hikes, with Fed policymakers stating that interest rates will continue to rise until the “neutral rate” of between 2.5 percent and 3.5 percent is reached. This means we can expect rate hikes once a quarter in 2019, barring a sharp downturn in the economy. The policy of gradual increases is good news for the U.S dollar, and conversely bearish for gold prices, as higher interest rates mean that the greenback is more attractive to investors.

 

XAU/USD Fundamentals

Tuesday (November 13)

  • 5:14 US NFIB Small Business Index. Estimate 108.0. Actual 107.4
  • 10:00 US FOMC Member Brainard Speaks
  • 14:00 US Federal Budget Balance. Estimate -116.6B
  • Tentative – US Loan Officer Survey

Wednesday (November 14)

  • 8:30 US CPI. Estimate 0.3%
  • 8:30 US Core CPI. Estimate 0.2%
  • 18:00 US Fed Chair Powell Speaks

*All release times are EST

*Key events are in bold

 

XAU/USD for Tuesday, November 13, 2018

XAU/USD November 13 at 11:35 DST

Open: 1200.63 High: 1205.31 Low: 1196.44 Close: 1203.73

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1122 1146 1170 1204 1220 1236

XAU/USD posted gains in the Asian session but retracted in European trade. The pair has moved upwards in North American session

  • 1170 is providing support
  • 1204 is fluid. It is a weak resistance line
  • Current range: 1170 to 1204

Further levels in both directions:

  • Below: 1170, 1146 and 1122
  • Above: 1204, 1220, 1236 and 1261

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.