Gold Slips to 2-Week Low, US Housing Data Next

Gold has lost ground in the Monday session. In North American trade, the spot price for an ounce of gold is $1306.68, down 1.03%. In economic news, there are no major releases on the schedule. On Tuesday, the US releases Building Permits and Housing Starts.

Gold prices jumped 4.3% in August, much of which can be attributed to investor jitters over the North Korean crisis. Recent tensions between North Korea and its neighbors had boosted gold, a safe-haven asset. Pyongyang has ratcheted tensions by launching missiles over Japan and testing a hydrogen bomb. However, the crisis has eased in the past week, as investor confidence held firm, despite North Korea firing another missile over Japan. However, the crisis is far from over, and so we could see further volatility from gold. On Sunday, the US ambassador to the United Nations, Nikki Haley, warned that the UN Security Council had exhausted its options, and the US might have to refer the matter to the Pentagon. This was followed by a US-South Korean air drill on Monday.

US consumer spending has been a sore spot in a generally strong economy, and there was more disappointing news on Friday, as August retail sales reports missed expectations. Core Retail Sales slowed to 0.2%, missing the forecast of 0.5%. Retail Sales was even worse, posting a decline of 0.2%, compared to the estimate of +0.1%. Much of the slowdown in the August numbers are attributable to lower automobile sales, which have been slowing in recent months, and was likely made worse by Hurricane Harvey. These numbers underscore continuing weakness in consumer spending, despite a strong labor market. The Federal Reserve remains concerned about weak consumer spending, a key driver of economic growth, and could make reference to the lack of spending in its rate statement, which will be released later this week.

Gold Falls Ahead of Fed Meeting

XAU/USD Fundamentals

Monday (September 18)

• 10:00 US NAHB Housing Market Index. Estimate 67. Actual 64
• 11:00 BoE Governor Mark Carney Speaks
• 16:00 US TIC Long-Term Purchases. Estimate 42.3B

Tuesday (September 19)

• 8:30 US Building Permits. Estimate 1.22M
• 8:30 US Current Account. Estimate -113B
• 8:30 US Housing Starts. Estimate 1.18M
• 8:30 US Import Prices. Estimate 0.4%

*All release times are GMT

*Key events are in bold

XAU/USD for Monday, September 18, 2017

XAU/USD September 18 at 12:40 EST

Open: 1320.24 High: 1320.24 Low: 1306.61 Close: 1307.25

XAU/USD Technical

• XAU/USD ticked lower in the Asian session. The pair has posted losses in European and North American trade
• 1307 was tested earlier in support and is under pressure
• 1337 is the next resistance line
• Current range: 1307 to 1337

Further levels in both directions:

• Below: 1307, 1285 and 1260
• Above: 1337, 1367, 1392 and 1416

OANDA’s Open Positions Ratio

XAU/USD is unchanged in the Monday session. Currently, long and short positions are evenly split, indicative of a lack of trader bias as to what direction XAU/USD will take next. 

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