Gold Edges Higher, CPI Reports Next

Gold has started the new trading week with small gains. In Monday’s North American session, gold is trading at $1341.17. On the release front, there were no major US events on the schedule. The Empire State Manufacturing Index dropped 4.2 points, well below expectations. On Tuesday, the US will release consumer inflation reports and Building Permits. CPI is expected to dip to a flat 0.0%, and a reading in negative territory would send alarm bells off in the markets and could boost safe-haven gold to higher levels.

US indicators ended the week on a sour note, led by retail sales reports. Core Retail Sales dropped 0.3%, while Retail Sales slipped to a flat 0.0%. There was no relief from PPI readings, which measure wholesale prices. PPI came in at -0.4% and Core PPI declined 0.3%. All four releases missed expectations and were lower than their previous readings. UoM Consumer Sentiment improved to 90.4 points, but this fell short of expectations. The soft PPI readings point to ongoing low inflation levels, well below the Federal Reserve’s target of about 2.0%. The Fed next meets in September to decide whether to raise interest rates. A soft GDP report last month had dampened expectations about a rate hike before 2017, but sharp employment numbers, led by a stellar NFP report, raised the odds of a September hike. However, Friday’s soft numbers have again dampened enthusiasm about a rate hike in September, and in all likelihood, the Fed will stay on the sidelines until December or even later.

XAU/USD Fundamentals

Monday (August 15)

  • 8:30 US Empire State Manufacturing Index. Estimate 2.1. Actual -4.2
  • 10:00 US NAHB Housing Market Index. Estimate 60. Actual 60
  • 16:00 US TIC Long-Term Purchases

Tuesday (August 16)

  • 8:30 US Building Permits. Estimate 1.16M
  • 8:30 US CPI. Estimate 0.0%
  • 8:30 US Core CPI. Estimate 0.2%

*Key releases are highlighted in bold

*All release times are EDT

XAU/USD for Monday, August 15, 2016

XAU/USD August 15 at 12:15 EDT

Open: 1338.98 High: 1343.88 Low: 1335.75 Close: 1341.17

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1279 1307 1331 1361 1388 1416
  • XAU/USD was flat in the Asian and European sessions. The pair has posted small gains in North American trade
  • There is resistance at 1361
  • 1331 is providing support
  • Current range: 1331 to 1361

Further levels in both directions:

  • Below: 1331, 1307 and 1279
  • Above: 1361, 1388, 1416 and 1447

OANDA’s Open Positions Ratio

On Monday, XAU/USD ratio is showing long positions with a majority (62%), indicative of trader bias towards XAU/USD reversing directions and moving upwards. 

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.