Advertisement
Advertisement

Gold Trades Sideways as Dollar Weigh on the Yellow Metal

By:
David Becker
Published: Apr 19, 2018, 18:59 UTC

Gold prices continued to trade sideways, as U.S. yields gained traction on Thursday buoyed the greenback and paving the way for lower gold prices. Prices

Comex Gold

Gold prices continued to trade sideways, as U.S. yields gained traction on Thursday buoyed the greenback and paving the way for lower gold prices. Prices have been trading in a tight range for nearly all of 2018, with support seen near the 10-day moving average at 1,345, and resistance seen the April highs at 1,365. The fast stochastic generated a crossover sell signal which points to accelerating negative momentum. Strong jobless claims and a solid Philly fed survey buoyed the dollar.

U.S. initial jobless claims dipped

U.S. initial jobless claims dipped 1k to 232k in the week ended April 14 after falling 9k to 233k in the prior week. That brought the 4-week moving average to 231.25k from 230k. Continuing claims declined 15k to 1,863k in the April 7 week following the 60k jump to 1,878k (revised from 1,871k) in the last week of March. This week’s jobless claims numbers take on a little more significance since they correspond to the BLS survey week.

U.S. Philly Fed manufacturing index edged up

U.S. Philly Fed manufacturing index edged up 0.9 points to 23.2 in April after sliding 3.5 points to 22.3 in March. The index is down from the 28.8 recent high from October, and the 35.5 two-year peak from May. The index has held solidly above 20, however, since November 2016. The employment component rose to 27.1 from 25.6, and is the highest since 30.7 in October, with the workweek rising to 21.6 from 12.8. But new orders dropped to 18.4 from 35.7. Price paid climbed to 56.4 from 42.6, with prices received at 29.8 from 20.7. The 6-month outlook index declined to 40.7 from 47.9 and is the lowest since July. The future employment index slipped to 34.6 from 37.1, with new orders at 37.2 from 48.8, prices paid at 66.8 from 62.8, prices received at 47.9 from 51.3, and capital expenditures at 29.8 from 35.9.

Fed Governor Brainard warned on growing pro-cyclical pressures

Fed Governor Brainard warned on growing pro-cyclical pressures, such as rising asset prices and leverage, though she said it was too early in the economic cycle to revisit calibration of core capital and liquidity requirements for large banks. That said, she felt it may be appropriate to require banks to build a counter-cyclical capital buffer.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

Did you find this article useful?

Advertisement