Gold Ready to Close Its Best Month in Three Years

Spending more than you get.

Hey FX Emperors, the United States released a personal income and spending report that showed Americans are saving less. In Europe, the CPI rate declined, putting the ECB in a more complicated position.

Gold, silver, and other metals are trading sideways on Friday as investors are watching developments about the willingness that the United States and China are showing to solve their trade war.

The power of the American consumer

Economic data in the United States showed a weaker than expected personal income increase but an American consumer spending more money than previously anticipated.

Personal spending rose 0.6% in July, above the 0.5% expected by the market and the double of the 0.3% growth performed in June. However, while Americans are spending more money, they are not getting as much as expected.

Personal income rose a weak 0.1% in July, well below the 0.3% anticipated, and the 0.5% posted in the previous month.

In Europe, the Consumer Price Index rose 1.0% between August 2018 and 2019, in line with expectations, but core annual inflation was 0.9% in August, below the 1.0% expected by experts and well below the ECB target of 2.0%.

Watch out the EUR/USD, it could affect the Dollar index, and therefore metals.

Gold to close the best month since February 2016

Gold is trading in consolidation mode just above the 1,520 level as the unit logged two days of declines. XAU/USD is right now at 1,527, flat on the day.

In the day, XAU/USD has been trading sideways between 1,520 and 1,530. It seems that investors did the end-month rebalancing and profit-taking on Thursday, as the unit declined from highs at 1,550 and tested the 1,520.

On the week, gold is ready to close its fifth consecutive period of wins; however, this time the weekly candlestick looks different as it is performing a Doji candle. Let’s see how it closes. As for now, gold is 0.15% positive on the week.

In the monthly chart, XAU/USD is finishing its fourth month of gains with August as its best period since February 2016. The metal is closing the period with 8.30% gains and a technical break above the 1,450 that could be key in the next few months. Now, the unit is consolidating above the 1,500 area.

Metals roundup for August 30

Silver is trading positive again after posting a daily decline on Thursday. The unit looks supported by the 18.05 area, and it is now testing the 18.50 level. Above there, the high of 18.65 is waiting for the cross.

Copper is trading negative on the last day of the week as the unit is taking a breath after four positive straight days. The unit was recovering from lows since May 2017 at 2.490 reached on August 26, and it rose until yesterday’s high at 2.5900. However, the metal was unable to break above it, and it is now 0.25% negative in the day at 1.5625.

Futures of Palladium are trading positive on the day as the unit is testing the 1,490 level, which has been acting as a short-term resistance in the last ten days. Palladium is trading inside a triangle, now testing the upper side, above there, resistances are at 1,560 and 1,600.

Platinum is extending its rally for the fourth straight day, and it is now testing the 940.00 area, its highest level since April 20, 2018. Technical indicators show an overbought metal, but it signals more room for the upside. Above it, 948.00 and 960.00 are the levels to watch.