XAU/USD – Gold Edges Higher, CB Consumer Confidence Surges

Gold has posted slight gains in the Tuesday session. In North American trade, the spot price for one ounce stands at $1137.32. On the release front, CB Consumer Confidence climbed to 113.7, easily exceeding the estimate of 108.9. On Wednesday, the US releases Pending Home Sales, with the markets expecting a strong gain of 0.6%.

As 2016 wraps up, US consumer confidence indicators continue to move upwards in what analysts are describing as a post-election surge in optimism. The CB Consumer Confidence report surged in December to 113.7, its highest level since August 2001. This reading comes on the heels of UoM Consumer Sentiment, which climbed to a 12-year high, with a reading of 93.8 points. Clearly, consumers are optimistic that the economy will continue to improve under Donald Trump. Both of these well-respected surveys found that consumers are confident that continuing economic growth will create new jobs and raise incomes. Trump’s economic platform remains short on details, but he has promised to cut taxes while increasing fiscal spending.

The US economy continues to expand at a brisk clip, as underscored by the most recent revision to third quarter GDP. The Final GDP reading of 3.5% beat the estimate of 3.3%. This figure marked an upward revision of the previous GDP estimate of 3.2%. The stellar reading can be attributed to stronger consumer spending and an increase in business investment, and marked the strongest growth rate since the third quarter of 2015.

XAU/USD Fundamentals

Tuesday (December 27)

• 9:00 US S&P/CS Composite-20 HPI. Estimate 5.0%. Actual 5.1%
• 10:00 US CB Consumer Confidence. Estimate 108.9. Actual 113.7
• 10:00 US Richmond Manufacturing Index. Estimate 5. Actual 8

Wednesday (December 28)

• 10:00 US Pending Home Sales. Estimate 0.6%

*All release times are EST

*Key events are in bold

XAU/USD for Tuesday, December 27, 2016

XAU/USD December 27 at 13:30 EST

Open: 1133.33 High: 1150.41 Low: 1131.56 Close: 1137.32

XAU/USD Technical

• XAU/USD posted small gains in the Asian and European sessions. The pair has edged lower in North American trade
• 1130 is providing support
• 1146 is the next resistance line
• Current range: 1130 to 1146

Further levels in both directions:

• Below: 1130, 1111, 1076 and 1043
• Above: 1146, 1174 and 1199

OANDA’s Open Positions Ratio

XAU/USD ratio has shown slight gains in long positions. Currently, long positions command a substantial majority (78%). This is indicative of trader bias towards XAU/USD continuing to climb to higher levels.

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