Gold slips on optimism over U.S-China talks

Gold is considerably lower on Monday, erasing most of the gains seen on Friday. In the North American session, the spot price for one ounce of gold is $1278.68, down 0.58% on the day. On the fundamentals front, the Core PCE Price Index was within expectations. This indicator is closely watched, as it is the Federal Reserve’s preferred gauge of inflation. Personal spending sparkled in March, with a gain of 0.9%. This beat the estimate of 0.7% and was the strongest gain since May 2015. On Tuesday, the U.S. releases Chicago PMI and CB Consumer Confidence.

The U.S. and China have made substantial progress in their talks, and a trade agreement appears within reach. Negotiations will continue on April 30 in Beijing, and U.S. Treasury Secretary Mnuchin acknowledged the progress made, adding that the talks were in their “final laps”. However, Mnuchin cautioned that the talks could still end without an agreement. The nasty trade war between the two largest economies in the world has rocked the global economy and curbed growth. If the sides continue to make progress, there could be a summit between President Trump and President Xi of China sometime in May. Gold is a traditional safe haven, so a new trade agreement between the U.S. and China would likely see investor risk appetite soar and gold prices head lower.

Dodging the information avalanche

A massive week for currencies, stocks and bonds

XAU/USD Fundamentals

Monday (April 29)

  • 8:30 (Feb. Data) – US Core PCE Price Index. Estimate 0.2%. Actual 0.1%
  • 8:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.1%
  • 8:30 (Feb. Data) – US Personal Spending. Estimate 0.2%. Actual 0.0%
  • 8:30 US Personal Spending. Estimate 0.7%. Actual 0.9%
  • 8:30 US Personal Income. Estimate 0.4%. Actual 0.1%

Tuesday (April 30)

  • 8:30 US Employment Cost Index. Estimate 0.7%
  • 9:45 US Chicago PMI. Estimate 59.1
  • 10:00 US CB Consumer Confidence. Estimate 126.2

*All release times are DST

*Key events are in bold

XAU/USD for Monday, April 29, 2019

XAU/USD April 28 at 12:20 DST

Open: 1286.14 High: 1286.74 Low: 1278.20 Close: 1278.39

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1218 1243 1261 1284 1306 1326

XAU/USD was flat in the Asian session. The pair edged lower in the European session and has posted small losses in North American trade

  • 1261 is providing support
  • 1284 is the next resistance line
  • Current range: 1261 to 1284

Further levels in both directions:

  • Below:  1261, 1243 and 1218
  • Above: 1284, 1306, 1326 and 1344

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.