Gold Gains On Mixed Durable Reports, Yellen Remarks

Gold has posted gains in the Friday session. In North American trade, spot gold is trading at $1291.95, up 0.44% on the day. In economic news, durable goods reports were mixed. Core Durable Goods Orders improved to 0.5%, edging above the estimate of 0.4%. However, Durable Goods Orders declined 6.8%, missing the forecast of -6.0%. At the Jackson Hole meeting of central bankers, Janet Yellen has concluded her speech and gold has responded with gains.

Friday is Day 2 of the Jackson Hole Symposium, and featured the star of the show, Federal Reserve Chair Janet Yellen. However, did not take advantage of an ideal opportunity to address US monetary policy, choosing instead to discuss financial reforms. Yellen said that measures put in place in 2007 and 2009 in response to the financial crisis had been effective, adding that future reforms should remain modest. Her comments seemed aimed at a domestic audience, as her message to exercise caution comes at a time when President Trump is looking into wide-ranging reforms in the finance industry. The pro-business Trump has complained that the financial sector is over-regulated and has said that he wants to ease current regulations.

There was some disappointment in the markets as Janet Yellen did not address interest rate policy at her speech in Jackson Hole, and the dollar responded with losses, as gold has moved higher. A December rate hike remains on the table, but the Fed policymakers have sounded lukewarm about another hike in 2017, and the odds of a rate hike in December remain below 50%. One of the principal impediments to rate hike is inflation, which remains at stubbornly low levels. This, despite solid economic growth and a labor market that is close to capacity.

Fed Chair Defends US Financial Rules at Jackson Hole

XAU/USD Fundamentals

Friday (August 25)

  • 8:30 US Core Durable Goods Orders. Estimate 0.4%. Actual 0.5%
  • 8:30 US Durable Goods Orders. Estimate -6.0%. Actual -6.8%
  • 10:00 US Fed Chair Janet Yellen Speaks
  • All Day – Jackson Hole Symposium (Day 2)

XAU/USD for Friday, August 25, 2017

XAU/USD August 25 at 12:45 EST

Open: 1286.52 High: 1295.15 Low: 1276.20 Close: 1291.95

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1232 1260 1285 1307 1337 1367
  • XAU/USD showed little movement in the Asian and European sessions. In North American trade, the pair lost ground but has recovered and is moving upwards
  • 1285 is a weak support level
  • 1307 is the next resistance line
  • Current range: 1285 to 1307

Further levels in both directions:

  • Below: 1285, 1260, 1232, 1199 and 1170
  • Above: 1307, 1337 and 1367

OANDA’s Open Positions Ratio

In the Friday session, XAU/USD ratio is showing short positions with a majority (55%), indicative of a trader of bias towards XAU/USD reversing directions and moving higher.

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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.