Gold has started the new trading week with losses. In North American trade, XAU/USD is down 0.49%, with spot gold trading at $1248.74 per ounce. On the release front, there are no economic indicators. The sole events on the schedule are comments from FOMC members William Dudley and Charles Evans.
Gold prices dipped last week after the Fed’s hawkish rate statement, and the metal has started the week with losses, again courtesy of the FOMC. Earlier in the day, Federal Reserve of New York President Charles Dudley cautioned the Fed against halting its current tightening cycle. Dudley said that the economy was performing well, and reiterating the sentiment expressed in the rate statement, Dudley said that he was not concerned with inflation levels, which are at 1.5 percent (well below the Fed’s target of 2.0%). Dudley’s upbeat remarks have boosted the dollar and have pushed gold prices to their lowest level since May 15.
Friday’s US releases were a disappointment, as construction and consumer confidence reports missed expectations. Building Permits dropped to 1.17 million, its lowest level since August 2016. Housing Starts were also week, as the reading of 1.09 million marked the lowest since November 2016. There is concern that the soft construction numbers could weigh on second-quarter growth. There was more bad news from UoM Consumer Sentiment, which dipped to 94.7 in May, marking a 7-month low. This is significant, as it is the indicator’s lowest reading since President Trump took office, and points to consumer unease with how the US economy is being handled. There are troubling signs that the June UoM report could be even lower, coming after the Comey testimony which has damaged Trump’s credibility even further.
