Gold Prices Tap 2-Week Highs on Disappointing US Data
Gold prices rallied in yesterday’s trading following worse-than-expected US data. XAUUSD opened at $1,478.02 and traded higher to its highest level in almost two weeks at $1,485.88. By the end of the New York session, the previous metal had closed at $1,484.98.
Disappointing US Data Boost Gold Prices
Yesterday, the Census Bureau reported that durable goods orders declined by 2.0% in November. This disappointed expectations which called for a 0.2% uptick. Meanwhile, core durable goods orders which reflects new purchase orders placed with manufacturers excluding transportation, were flat. The forecast was for a 1.5% growth rate.
New home sales for November also fell short of expectations. It printed at 719,000 which was lower than the 730,00 consensus.
These numbers were bearish for the US dollar as they raised concerns about the health of the US economy.
Later today, the Richmond Manufacturing Index is anticipated to print at 1 for December. It is due at 3:00 pm GMT.
Risk Aversion Looming?
Gold prices may have also rallied in response to reports that North Korea could launch a missile on Christmas Day. If this turns out to be true, lower volatility in the markets could spark a huge upside break in XAUUSD.
On the hourly time frame, gold prices are trending higher. This is evidenced by the rising trend line that becomes apparent when you connect the recent higher lows on gold prices from December 18 to 20. If sellers dominate today’s trading, XAUUSD could pull back some of its gains to the trend line around $1,482.37 where the 50% Fib level also seems to be (when you draw the Fibonacci retracement tool from the low of December 20 to today’s Asian session high).