Gold Remains Sluggish Over The Mixed Economic Data

  • Mar 27, 2019 AEDT
  • Team Kalkine
Gold Remains Sluggish Over The Mixed Economic Data

Gold prices has remained flat with gold futures (COMEX) moving in a narrow range of $1318 - $1324.50 over last few days, amid no significant development in the global economy.

The prices which rose significantly due to the global economic slowdown concerns in the last few trading sessions inversed without any significant drop.

The betterment in falling bond and dollar prices exerted a slight pressure on gold futures and the gains still remained capped around the previous day high of $1323 but managed to breach the previous day high by $1.45.

The factor which supported the gold future prices and provided a slight push above the previous day high was the weak U.S. economic data which came yesterday in the market. The U.S. Building permits which gauge the future construction activity in an economy slipped slightly below the market expectation of 1.32M. The U.S. Building Permits were at 1.30M for March 2019, which in turn supported the ongoing concerns of market participants of a slowdown in the U.S. economy and lifted the sentiments for safe assets such as gold.

However, the increase in housing prices exerted the pressure on the safe-haven and prevented any sharp gain on account of weaker economic data. The U.S. Housing Price Index rose to 0.6% as compared to the market expectations of 0.4% for January 2019. An increase in housing price is expected to attract investors in an economy; thus, a rise in housing price builds optimism among dollar investors and raise concerns among bullion investors, which in turn exerted pressure on gold prices and prevented its previous rally from extending further.

How did the junior gold miners react on ASX?

Gold Road Resources Limited (ASX: GOR), ended the day’s session on a negative note as compared to its previous close. The share prices of the company closed on ASX at A$1.015, down by 0.49% from its previous close.

Cardinal Resources Limited (ASX: CDV), ended the day’s session on a positive note as compared to its previous close. The stock of the company closed at A$0.350, up by 4.48% from its previous close.

Sipa Resources Limited (ASX: SRI), ended the day’S session on a positive note as compared to its previous close. The stock of the company closed at A$0.008, up by 14.29% from its previous close.

The gold miners on the Australian Stock Exchange reacted mixed on the stagnant gold prices. However, all of the three stocks gained momentum during the day session.

Gold Prices on Charts:

Source: Thomson Reuters: Gold Spot (Daily Chart)Source: Thomson Reuters: Gold Spot (Daily Chart)

Following the development on the daily chart, the prices are still moving in an uptrend, shown in the chart through an uptrend line. The prices are trading well above its 7 and 20-days exponential moving average (EMA). The prices marked a golden cross over when the short-term 7-days EMA crossed the medium term 20-days EMA from below.

7-days EMA is valued at approx. $1313, while the 20-days EMA is valued at approx. $1308. The prices are moving comfortably above the longer-term 200-days EMA, which is valued at approx. $1272. The Relative Strength Index of 14-days period is valued at 55.889, which is well above its mean value of 50.


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