Gold Posts Gains, Fed Minutes Ahead

Gold has posted sharp losses in the Monday session. In North American trading, the spot price for an ounce of gold is $1282.39, up 0.43% on the day. On the release front, Existing Home Sales improved to 5.48 million, beating the forecast of 5.42 million. Later in the day, Fed Chair Janet Yellen will speak at an event in New York City. Wednesday will be busy, as the US releases employment, durable goods and consumer confidence reports. Also, the Federal Reserve releases the minutes of its November policy meeting.

US housing indicators continue to beat expectations. On Monday, it was the turn of Existing Home Sales, which climbed to a 4-month high. On Friday, Building Permits and Housing Starts impressed the markets. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Starts also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.

As President Trump’s tax reform bill winds it way through Congress, gold prices have been fluctuating. On Monday, gold prices jumped 1.4%, erasing the losses seen on Friday. President Trump won a major legislative victory on Thursday, as the House of Representatives passed its version of the tax bill, by a vote of 227-205. However, with the vote largely based on party lines, Republicans will have a tougher battle passing the Senate version of the bill, as the Republicans have a slim majority of 52-48. The tax legislation provides major tax relief and cut corporate taxes from 35% to 20%, and if Congress does enact a new tax code, the US dollar could make strong gains, at the expense of gold.

XAU/USD Fundamentals

Tuesday (November 21)

• 10:00 US Existing Home Sales. Estimate 5.42M. Actual 5.48M
• 18:00 US Federal Reserve Chair Janet Yellen Speaks

Wednesday (November 22)

• 8:30 US Core Durable Goods Orders. Estimate 0.4%
• 8:30 US Unemployment Claims. Estimate 241K
• 8:30 US Core Durable Goods Orders. Estimate 0.4%
• 8:30 US Durable Goods Orders. Estimate 0.4%
• 10:00 US Revised UoM Consumer Sentiment. Estimate 98.2
• 14:00 US FOMC Meeting Minutes

*All release times are GMT

*Key events are in bold

XAU/USD for Tuesday, November 21, 2017

XAU/USD November 21 at 12:25 EST

Open: 1276.92 High: 1284.83 Low: 1276.27 Close: 1282.39

XAU/USD Technical

• XAU/USD was flat in the Asian session. The pair edged lower in the European sessions but has rebounded in North American trade
• 1260 is providing support
• 1285 is a weak resistance line
• Current range: 1260 to 1285

Further levels in both directions:

• Below: 1260, 1240 and 1213
• Above: 1285, 1307, 1337 and 1367

OANDA’s Open Positions Ratio

XAU/USD ratio is unchanged in the Tuesday session. Currently, long positions have a majority (66%), indicative of trader bias towards XAU/USD continuing to move to higher ground.

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.