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

S3 S2 S1 R1 R2 R3
1243 1261 1284 1306 1326 1344

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

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.