Gold slightly higher as durable goods orders slide

Gold has posted slight gains on Tuesday. In North American trade, the spot price for one ounce of gold is $1290.38, up 0.20% on the day. On the release front, Durable Goods Orders plunged 1.6%, a sharper decline than the estimate of -1.1%. Core Durable Goods Orders posted a weak gain of 0.1%, shy of the estimate of 0.3%. On Wednesday, the U.S. releases ISM Non-Manufacturing PMI and ADP nonfarm payrolls.

The U.S. economy remains strong, but this week’s key numbers have been anything but impressive. The weak durable goods orders data comes on the heels of soft retail sales numbers for March. Retail sales declined by 0.2%, shy of the estimate of +0.3%. Core retail sales declined by 0.4%, a sharp drop from the 0.9% gain a month earlier. Both indicators posted a second decline in three months, which is bound to raise concerns about the strength of the economy. There are concerns that the economy could be slowing down – growth for the first quarter could be as low as 0.8% annualized, compared to 2.2% in the fourth quarter.

Gold started the week with losses, as positive news out of China raised risk appetite and made gold less attractive. Chinese Caixin Manufacturing PMI improved to 50.8, easily beating the estimate of 50.1 points. Investors cheered as the indicator climbed to an 8-month high, after three successive readings in contraction territory. The Chinese economy has been hit hard by the trade war with the U.S., and a piece of good news sparked strong gains on the equity markets and sent gold prices lower.

It’s all about China

Safe-haven currencies rally as risk appetite takes a break

XAU/USD Fundamentals

Tuesday (April 2)

• 8:30 US Core Durable Goods Orders. Estimate 0.3%. Actual 0.1%
  
• 8:30 US Durable Goods Orders. Estimate -1.1%. Actual -1.6%
  
• All Day – U.S. Total Vehicles Sales. Estimate 16.7M

Wednesday (April 3)

• 8:15 US ADP Nonfarm Employment Change. Estimate 184K
• 10:00 US ISM Non-Manufacturing PMI. Estimate 58.1

*All release times are DST

*Key events are in bold

XAU/USD for Tuesday, April 2, 2019

XAU/USD April 2 at 12:15 DST

Open: 1287.74 High: 1291.93 Low: 1258.37 Close: 1290.38

XAU/USD Technical

XAU/USD showed limited movement in the Asian session. The pair edged higher in European trade and is steady in the North American session

• 1284 is providing support
• 1306 is the next resistance line
• Current range: 1284 to 1306
  

Further levels in both directions:

• Below: 1284, 1261 and 1243
• Above: 1306, 1326, 1344 and 1365

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