Gold quiet as housing data meets expectations, durable good orders ahead

Gold has ticked lower in the Tuesday session. In North American trade, the spot price for one ounce of gold is $1223.18, down 0.10% on the day. On the release front, construction numbers improved in October. Building Permits improved to 1.26 million and Housing Permits climbed to 1.23 million. On Wednesday, there are a host of  U.S. releases, highlighted by durable goods orders.

The Federal Reserve remains on track to gradually raise rates in 2019, but the pace could be slower than anticipated just a few weeks ago. Will this cause investors to move towards other assets, such as gold? This remains to be seen. There is no denying that the U.S economy is currently in great shape, with unemployment at historically low levels and the $1.5 trillion tax cut package boosting economic growth. However, the rosy picture could change next year. The U.S-China trade war is expected to take a bite out of U.S growth, and the stimulus from the tax cut will fade over time. GDP has been slowing on an annualized basis – from a sizzling 4.2% in the first quarter, to 3.5% in Q2, with Q3 expected at just 2.7%. The downward trend is expected to continue into 2019, with a growth forecast of 2.0% to 2.5%. If these forecasts materialize, the Fed could decide to raise rates more slowly next year. Many analysts had expected a hike of 25 basis points each quarter, but that could be revised lower to three rates next year. A December hike stands at 70 percent, down from 75% just one week ago. This has made the U.S dollar less attractive to investors and that could be good news for gold prices.

XAU/USD Fundamentals

Tuesday (November 20)

  • 8:30 US Building Permits. Estimate 1.26M. Actual 1.26M
  • 8:30 US Housing Starts. Estimate 1.23M. Actual 1.23M

Wednesday (November 21)

  • 8:30 US Core Durable Goods Orders. Estimate 0.4%
  • 8:30 US Durable Goods Orders. Estimate -2.2%
  • 8:30 US Unemployment Claims. Estimate 215K
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 98.4

*All release times are EST

*Key events are in bold

 

XAU/USD for Tuesday, November 20, 2018

XAU/USD November 20 at 12:25 DST

Open: 1222.73 High: 1223.90 Low: 1222.44 Close: 1223.03

 

XAU/USD Technical

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

XAU/USD posted small gains in the Asian session but retracted in European trade. The pair edged higher in the North American session but could not consolidate and has headed lower

  • 1220 is providing support
  • 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.