Gold Steady as US Posts Mixed Housing Reports

Gold is unchanged on Tuesday, as the spot price is $1172 per ounce early in the North American session. In economic news, US housing numbers were a mix, as Building Permits missed expectations, while Housing Starts rose sharply.

The markets got their first look this week at key data from the US, as US housing numbers were a mix. Building Permits dipped to 1.10 million in September, shy of the estimate of 1.16 million. This marked a 6-month low for the key indicator. There was much better news from US Housing Starts, which jumped to 1.21 million in the September report, easily beating the forecast of 1.14 million. There were mixed messages from US releases on Friday as well. UoM Consumer Sentiment, the primary gauge of consumer confidence, jumped to 92.1 points in October, up from 85.7 points. This easily beat the estimate of 88.8 points. At the same time, JOLTS Job Openings slipped to 5.37 million, way off the estimate of 5.77 million. The JOLTS release is especially important as it is watched closely by the Fed and is a factor in its decision-making process regarding monetary policy.

October has been good to the precious metal, which has jumped over 5% since the start of the month. Gold prices briefly pushed above $1190 last week, its highest level since June. Why the sudden surge? The markets were looking for an interest rate hike in September, but the Fed didn’t act and FOMC members continue to muddy the waters with contradictory statements about a rate hike. The resultant market disappointment and confusion has hurt the dollar but boosted bullion. Even if the Fed does raise rates, many analysts expect gold prices to remain stable, as the rate increases will likely be applied in small increments.

Meanwhile, US manufacturing numbers in October were dismal. The Empire State Manufacturing Index posted its third straight decline, coming in at -11.4 points, missing the forecast of -7.3 points. The Philly Fed Manufacturing Index, a key release, came in at -4.5 points, shy of the estimate of -1.8 points. These figures point to contraction in the US manufacturing sector, which continues to suffer from weak global demand.

XAU/USD Fundamentals

Tuesday (Oct. 20)

  • 12:30 US Building Permits. Estimate 1.16M. Actual 1.10M.
  • 12:30 US Housing Starts. Estimate 1.14M. Actual 1.20M.
  • 13:00 FOMC Member William Dudley Speaks.
  • 13:15 FOMC Member Jerome Powell Speaks.
  • 15:00 Federal Reserve Chair Janet Yellen Speaks.

*Key releases are highlighted in bold

*All release times are GMT


XAU/USD for Tuesday, October 20, 2015

Forex Rate Graph 21/1/13

XAU/USD October 20 at 13:30 GMT

XAU/USD 1172 H: 1177 L: 1167

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1134 1151 1162 1180 1192 1204
  • XAU/USD has shown little movement on Tuesday.
  • 1162 is providing support.
  • 1180 is a weak resistance line and could be tested during the North American session.
  • Current range: 1162 to 1180

Further levels in both directions:

  • Below: 1162, 1151 and 1134
  • Above: 1180, 1192 and 1204

OANDA’s Open Positions Ratio

XAU/USD ratio remains close to an even split between long and short positions, indicative of a lack of trader bias regarding which direction gold will take next.

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.