Gold steady, shrugs off strong manufacturing, jobless claims data

Gold has taken a pause in the Thursday session, after posting gains on Wednesday. In North American trade, the spot price for one ounce of gold is $1203.83, up 0.05% on the day. On the release front, U.S indicators looked sharp, as Philly Fed Manufacturing Index and unemployment claims both beat expectations.

Which direction is the housing sector headed? This week’s data has pointed in both directions, making it difficult to discern a trend. Earlier on Thursday, Existing Home Sales remained steady at 5.34 million, but this fell short of the estimate of 5.38 million. Key construction reports on Wednesday were a mix. Building Permits disappointed, dropping from 1.31 million to 1.23 million. This was well short of the estimate of 1.31 million and marked the weakest gain since September. There was better news from Housing Starts, which jumped from 1.17 million to 1.28 million, above the estimate of 1.24 million. This was a three-month high.

After a brief respite, the US-China trade spat ratcheted upwards this week. Following weeks of speculation, U.S President Trump announced 10% tariffs on some $200 billion worth of Chinese goods. Only this time, investors didn’t panic. In previous rounds of tariffs, the dollar posted strong gains, but this has not happened this time around. Investors appeared to have been ready for a move by Trump, and may be sighing in relief that the tariff was set at 10% rather than at 25%. One senior economist summed up Trump’s most recent salvo as “bad but manageable”. However, if the Chinese do indeed retaliate and the U.S takes further measures, this would likely shake up the markets and boost the U.S dollar.

Kiwi jumps on strongest growth in two years

U.S safe-haven appeal diminishes

GBP/USD jumps on Brexit reports and retail sales

XAU/USD Fundamentals

Thursday (September 20)

• 8:30 US Philly Fed Manufacturing Index. Estimate 17.5. Actual 22.9
• 8:30 US Unemployment Claims. Estimate 210K. Actual 201K
• 10:00 US CB Leading Index. Estimate 0.5%. Actual 0.4%
• 10:00 US Existing Home Sales. Estimate 5.36M. Actual 5.34M
• 10:30 US Natural Gas Storage. Estimate 81B. Actual 86B

*All release times are DST

*Key events are in bold

XAU/USD for Thursday, September 20, 2018

XAU/USD September 20 at 12:20 DST

Open: 1204.05 High: 1208.46 Low: 1201.34 Close: 1204.63

XAU/USD Technical

XAU/USD ticked higher in the Asian session. In European trade, the pair moved higher but gave up most of these gains. XAU/USD has posted small losses in North American trade.

• 1170 is providing support
• 1204 is fluid. Currently, it is a weak resistance line
• Current range: 1170 to 1204

Further levels in both directions:

• Below: 1170, 1146 and 1115
• Above: 1204, 1220, 1236 and 1261

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.