Gold climb continues as consumer confidence sinks

Gold has recorded strong gains in the Thursday session. In North American trade, the spot price for one ounce of gold is $1276.16, up 0.73% on the day. On the release front, U.S. unemployment claims rose slightly to 216 thousand, just shy of the estimate of 217 thousand. CB Consumer Confidence dropped to 128.1, down from 135.7 in the previous release. The reading was well short of the estimate of 133.7 points. On Friday, the U.S. publishes Chicago PMI and Pending Home Sales.

Gold prices continue to climb, hitting a 6-month high on Wednesday. The safe-haven asset has taken full advantage of jittery equity markets, gaining 4.3 percent in December. The equity markets have been in turmoil, with huge climbs and drops this week. This has boosted gold prices, as the safe-haven asset has become an attractive purchase for nervous investors watching the markets go up and down like a yo-yo.

Gold received a boost last week from the Federal Reserve, as the December rate statement was greeted with a thumbs-down from investors. Fed policymakers indicated that the current stance of gradual and incremental rate hikes would continue in 2019, although the Fed dot plot lowered the rate forecast from three rate hikes to two rate hikes.

Could there be a thaw in the deep-freeze trade war between the U.S. and China? There was a positive development on Wednesday, with the announcement that a U.S. delegation would travel to China to hold talks in the first week of January. The ongoing trade dispute between the world’s two largest economies has caused havoc in the equity markets and sent gold prices sharply higher. President Trump has agreed to suspend further tariffs on China while the sides are talking, but has promised more tariffs on March 1 if the sides are unable to reach a deal. A breakthrough in the impasse seems unlikely, but the fact that the sides are meeting face-to-face for the first time in months will likely improve the mood of jittery investors and could dampen gold’s impressive rally.

Plop Plop Fizz Fizz , oh what a relief it is

Stocks and commodity currencies drop as caution returns to Wall Street

XAU/USD Fundamentals

Thursday (December 27)

  • 8:30 US Unemployment Claims. Estimate 217K. Actual 216K
  • 9:00 US HPI. Estimate 0.3%. Actual 0.3%
  • 10:00 US CB Consumer Confidence. Estimate 133.7. Actual 128.1

Friday (December 28)

  • 9:45 US Chicago PMI. Estimate 61.4
  • 10:00 US Pending Home Sales. Estimate 0.9%

XAU/USD for Thursday, December 27, 2018

XAU/USD December 27 at 10:55 EST

Open: 1266.83 High: 1276.74 Low: 1266.65 Close: 1276.16

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1220 1236 1261 1284 1306 1326

In the Asian session, XAU/USD posted considerable gains. The pair posted slight losses in the European session but has reversed directions and headed higher

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

Further levels in both directions:

  • Below: 1261, 1236, 1220 and 1204
  • Above: 1284, 1306 and 1326

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.