XAU/USD – Gold Dips to 2-Week Lows on Mixed US Data

Gold has posted slight gains on Thursday, as the metal trades at a spot price of $1316.74 per ounce in the North American session. On the release front, Thursday was a data-heavy session after an uneventful few days. In the US, retail sales came in at -0.3%, weaker than the estimate of -0.1%. Unemployment Claims were close to the forecast, and the Philly Fed Manufacturing Index easily beat expectations. On Friday, the US releases CPI and UoM Consumer Sentiment.

Gold prices have dropped one percent this week, as the markets continue to speculate about a Federal Reserve rate hike. Will the downward trend continue? Gold prices are sensitive to interest rate moves, so we can expect some movement from the base metal in the days ahead of the Federal Reserve policy meeting on September 21. Recent comments from FOMC members have done little to clarify what are Fed’s monetary plans for the remainder of the year. As things currently stand, a September hike has been priced in at 15%, while the likelihood of a December move is 43%. These numbers could drop after unimpressive data from US retail sales reports on Thursday. Retail Sales declined 0.3% in August, marking its first decline in five months. There was no relief from Core Retail Sales, which fell 0.1% and missed expectations. The weak retail sales numbers point to softness in consumer spending, a key driver of economic growth. There was also some positive news, as unemployment claims remained steady at 260 thousand, slightly below the forecast. As well,the Philly Fed Manufacturing soared with a reading of 12.8 points, crushing the estimate of 1.1 points. This marked the indicator’s highest monthly gains since June 2015. Next up are consumer inflation and confidence reports, which will be released on Friday. US inflation numbers have been very soft for months, and little change is expected in the August releases. If US inflation numbers disappoint the markets, the odds of a rate hike in 2016 will decrease, and this could boost gold prices.

XAU/USD Fundamentals

Thursday (September 15)

• 8:30 US Unemployment Claims. Estimate 262K. Actual 260K
• 8:30 US Retail Sales. Estimate -0.1%. Actual -0.3%
• 8:30 US Philly Fed Manufacturing Index. Estimate 1.1. Actual 12.8
• 8:30 US PPI. Estimate 0.1%. Actual 0.0%
• 8:30 US Core Retail Sales. Estimate 0.3%. Actual -0.1%
• 8:30 US Core PPI. Estimate 0.1%. Actual 0.1%
• 8:30 US Current Account. Estimate -120B. Actual -120B
• 8:30 US Empire State Manufacturing Index. Estimate -0.9. Actual -2.0
• 9:15 US Capacity Utilization Rate. Estimate 75.8%. Actual 75.5%
• 9:15 US Industrial Production. Estimate -0.2%. Actual -0.4%
• 10:00 US Business Inventories. Estimate 0.1%. Actual 0.0%
• 10:30 US Natural Gas Storage. Estimate 57B. Actual 62B

Upcoming Key Events

Friday (September 16)

• 8:30 US CPI. Estimate 0.1%
• 8:30 US Core CPI. Estimate 0.2%
• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 91.0

*Key releases are highlighted in bold

*All release times are EDT

XAU/USD for Thursday, September 15, 2016

XAU/USD September 15 at 13:00 EDT

Open: 1322.73 High: 1328.24 Low: 1309.27 Close: 1316.74

XAU/USD Technical

• XAU/USD has shown limited movement in the Asian and European sessions. The pair has been choppy in North American trade
• 1307 is providing weak support
• There is resistance at 1331
• Current range: 1307 to 1331

Further levels in both directions:

• Below: 1307, 1279 and 1245
• Above: 1331, 1361, 1388 and 1416

OANDA’s Open Positions Ratio

XAU/USD ratio is showing movement towards long positions on Thursday. Currently, long positions have a strong majority (74%), 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.