Summary:

  • Durable goods orders miss but core reading beats
  • USD set for 5th gain in last 6 weeks
  • Gold continues to rise above 1300

The latest consumer spending data from the US has sent some fairly mixed signals on the sector, with the a pretty large drop in the headline negated by a better core reading. The durable goods orders m/m for April fell to -1.7% from 2.7% previously (revised higher from 2.6%), further than the expected -1.3%. However, the core reading often holds more weight on these data points and a pleasing 0.9% increase, compared to +0.5% forecast has offset the negativity from the headline print. 

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 Durable goods orders remains fairly strong in the longer term with a decent amount of YoY growth seen in both the headline and core readings. Source: XTB Macrobond

The rally seen in the buck in recent weeks has continued since Monday, with the USD index (USDIDX on Xstation) moving up back near the December high. After the market made a break out from the period of consolidation there has been series of higher highs and higher lows on weekly candles and if the current candle ends today in the green, then that would mark 5 advances in the last week. 

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 The USDIDX is now retesting the 38.2% fib at 94.16 of the larger decline from the high seen back in late 2016. Source: xStation

The past week could have signalled a turning point for Gold, with the precious metal set to end a run of declines with a weekly gain. In dropping decisively below the 1303.25 level last week the market made an attempted break lower, but price failed to follow through and yesterday saw Gold end back above 1303.25. This is a level to keep an eye on for tonight’s close with an end above 1303.25 further suggesting the break lower was a false one, whereas if price slips once more then another attempt to close the gap from 1273 may occur. 

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 Gold has moved higher in recent sessions and is looking to end the week back above the key 1303.25 level. Source: xStation