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Gold moves higher as investors look for cues

Gold has posted gains in the Monday session. In North American trade, the spot price for one ounce of gold is $1242.52, up 0.32% on the day. In economic news, there are no major U.S releases. The Empire State Manufacturing Index dropped sharply to 10.9, down from 23.3 points in the previous release. This was well short of the estimate of 20.1 points. On Tuesday, the U.S. releases housing starts and building permits.

The U.S. released consumer November spending and inflation numbers last week. Although the numbers are down compared to October, the indicators show that the economy has lost some steam but still remains strong. Retail sales climbed in November, but the gains were muted compared to October. Core retail sales dropped from 0.7% to 0.2%, while retail sales declined to 0.2%, down from 0.8%. Still, retail sales managed to beat the estimate of 0.1%. Lower oil prices have boosted consumer spending, which is expected to look strong in the fourth quarter.

Inflation data has also softened. CPI dropped to 0.0% in November, down from 0.3% a month earlier. This marked the lowest level since May. Core CPI remained pegged at 0.2 percent. The weak readings can be attributed to falling oil prices, which has led to a sharp decline in gasoline prices. On an annualized basis, inflation gained 2.2 percent in November, down from 2.5 percent in October. With inflation still above the Federal Reserve’s target of 2 percent, policymakers have some room to scale back on rate hikes in order to adjust to softer economic conditions.

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Interesting Week Ahead For Markets

XAU/USD Fundamentals

Monday (December 17)

  • 8:30 US Empire State Manufacturing Index. Estimate 20.1. Actual 10.9
  • 10:00 US NAHB Housing Market Index. Estimate 61
  • 16:00 US TIC Long-Term Purchases

Tuesday (December 18)

  • 8:30 US Building Permits. Estimate 1.27M
  • 8:30 US Housing Starts. Estimate 1.23M

*All release times are EST

*Key events are in bold

XAU/USD for Monday, December 17, 2018

XAU/USD December 17 at 12:05 EST

Open: 1238.59 High: 1244.21 Low: 1235.89 Close: 1242.52

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1204 1220 1236 1261 1284 1306

In the Asian session, XAU/USD  posted losses but recovered. The pair edged higher in the European trade and has posted stronger gains in North American trade

  • 1236 is providing support
  • 1261 is the next resistance line
  • Current range: 1236 to 1261

Further levels in both directions:

  • Below: 1236, 1220, 1204 and 1170
  • Above: 1261, 1284 and 1306

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.

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