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David Becker

Gold prices rebounded from session lows, as a risk on day turned into a risk-off day, after the Trump administration announced that they were considering reducing investment into China. The White House floated the idea that they might consider forcing the exchanges to delist Chinese companies from US exchanges, as a trade retaliation. Gold was initially down early as stronger than expected US durable goods orders lifted US yields putting upward pressure on the dollar and downward weight on gold prices.

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Technical Analysis

Gold prices whipsawed moving lower than higher bouncing just above support near the 50-day moving average at 1,492. Resistance is seen near the 10-day moving average at 1,505 and then the weekly highs at 1,535. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal in the middle of the neutral range. Medium-term momentum has turned negative again. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices for the yellow metal.


Durable Goods Order Rise More than Expected

Durable goods, which are items that are expected to last more than three years or more, rose 0.2% in August after surging 2.0% in the prior month. Expectations had been for the headline durable goods number to fall by 1%. Orders for transportation equipment fell 0.4% after jumping 7.2% in July. Motor vehicles and parts orders decreased 0.8% last month. Orders for non-defense aircraft and parts tumbled 17.1%. Boeing reported on its website that it had received only six aircraft orders in August, down 25-since July. The Commerce Department reported that orders for non-defense capital goods excluding aircraft, a proxy for business spending, dropped 0.2% last month amid weak demand for electrical equipment.

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