Gold Edges Higher, US GDP Ahead

 | Nov 24, 2015 06:04AM ET

Gold is steady on Tuesday, as the metal trades at a spot price of $1074.19 in the European session. In the US, all eyes are on Preliminary GDP. As well, the US will release CB Consumer Confidence. On Wednesday, there are two key major events – Core Durable Goods Orders and Unemployment Claims.

The guessing game continues, as the markets hunt for clues as to what we can expect from the Federal Reserve’s policy meeting in early December. Last week’s Fed minutes did not confirm a December rate hike, but most analysts feel that the long-awaited move will indeed occur next month. Market expectations have risen to 66% that the Fed will make a move next month, and recent comments by Fed policymakers have hinted that a rate move is a strong possibility. At the past two policy meetings, the vote against a rate hike was 9-1, but that clearly will not be the outcome at the December meeting. With the US economy showing improvement and employment and consumer indicators pointing upwards, the markets appear prepared for a small hike of 0.25% or 0.50%, and there is a growing view that modest, incremental moves would not cause unwanted turbulence on the global markets. One remaining question mark in the rate move puzzle is that of inflation levels. Recent inflation readings have been weak, and the Fed has repeatedly stated that inflation is a key consideration in any decision to raise rates. The markets will get a look at key inflation indicators shortly before the critical Fed policy meeting on December 16.

The economic slowdown in China and other emerging countries continues to affect markets worldwide, and one of the damaging results has been a sharp decline in commodity prices, including base metals such as gold. Somewhat surprisingly, gold has not been able to capitalize on its traditional reputation as a safe-haven in times of trouble, despite the attacks in Paris and terror alerts in France and other European countries. The precious metal has plunged since mid-October, losing some 9 percent of its value. There are a host of key releases, led by Preliminary GDP, prior to the Thanksgiving holiday, so we could see some volatility from XAU/USD during the week.

XAU/USD Fundamentals

Tuesday (Nov. 24)

  • 13:30 US Preliminary GDP. Estimate 2.0%
  • 13:30 US Goods Trade Balance. Estimate -61.8B
  • 13:30 US Preliminary GDP Price Index. Estimate 1.2%
  • 14:00 US S&P/CS Composite-20 HPI. Estimate 5.2%
  • 15:00 US CB Consumer Confidence. Estimate 99.3 points
  • 15:00 US Richmond Manufacturing Index. Estimate 0 points

Upcoming Key Events

Wednesday (Nov. 25)

Get The News You Want
Read market moving news with a personalized feed of stocks you care about.
Get The App

  • 13:30 US Core Durable Goods Orders. Estimate 0.5%
  • 13:30 US Unemployment Claims. Estimate 273K

*Key releases are highlighted in bold

*All release times are GMT

XAU/USD for Tuesday, November 24, 2015