Gold Dips as North Korean Tensions Ease

Gold has posted losses to start off the week. In North American trade, spot gold is trading at $1283.99, down 0.43% on the day. On the release front, there are no US events on the schedule. On Tuesday, the US releases retail sales and core retail sales, key gauges of consumer spending.

The US economy remains strong, and although consumer confidence levels are high, this hasn’t translated into higher consumer spending, a key driver of economic growth. After declines in retail sales in June, the markets are expecting gains in July, and strong readings could lift the US dollar and send gold prices lower. Investors are also keeping an eye on the Federal Reserve, which has said that it will begin trimming its bloated balance sheet of $4.2 trillion, most likely in September. This could weigh on gold prices, as a cut of $60 billion in the balance sheet is equivalent to a rate hike of 25 basis points.

Gold prices have dipped on Monday, as the crisis between North Korea and the US has eased. Last week, tensions soared between the two enemies, sending gold about 2.4%, as investors dumped shares and snapped up the safe-haven metal. Tensions between North Korea and the US remain high, but the prevalent sentiment in the markets is that a diplomatic solution will be found to end the crisis. Still, Donald Trump and Kim Jon-un are unpredictable leaders, and any move by either side could easily ratchet up tensions and unnerve investors. Donald Trump continues to deal with domestic problems as well, and the White House faced stinging criticism from both Republicans and Democrats, as Trump failed to single out white supremacists for the violence in Charlottseville, Virginia, where one person was killed at a demonstration against far-right marchers.

XAU/USD Fundamentals

Monday (August 14)

  • There are no US events

Upcoming Key Events

Tuesday (August 15)

  • 8:30 US Core Retail Sales. Estimate 0.3%
  • 8:30 US Retail Sales. Estimate 0.4%

*All release times are EDT

*Key events are in bold

XAU/USD for Monday, August 14, 2017

XAU/USD August 14 at 12:25 EST

Open: 1289.36 High: 1290.04 Low: 1278.69 Close: 1284.74

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1199 1232 1260 1285 1307 1337
  • XAU/USD ticked lower in the Asian session. The pair posted losses in the European session but has partially recovered in North American trade
  • 1260 is providing support
  • 1285 was tested earlier in resistance and is under pressure
  • Current range: 1260 to 1285

Further levels in both directions:

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

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight movement towards short positions. Currently, long positions have a majority (53%), indicative of 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 analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.