Summary:

• Mixed batch of US data sees Gold add to recent gains
• Durable goods orders improve but core reading disappoints
• Weekly initial jobless claims tick higher to 244k

Today’s dose of data from the US has failed to deliver a clear picture on the health of the US economy. The durable goods orders rose by 6.5% in month on month terms which was a marked beat on the +3.5% expected and also the prior reading of -0.8% (which itself was revised higher from -1.1%.) However the core reading showed only a 0.2% increase – below the +0.4% expected but the prior reading was revised higher from 0.1% to 0.3%. Overall this leaves a mildly positive feeling with both of these economic indicators residing towards the top of their recent range. Furthermore, both of these readings continue to rise and this means that they are now at the highest levels in year on year terms since 2014.  

 

 The durable goods orders and the core reading have both risen to their highest level since 2014. However today’s core reading rose by less than expected and has taken the shine off the release.

At the same time as the durable goods release the weekly initial jobless claims number was also announced. This employment indicator rose to 244k from 233k previously, with the number being slightly above the 240k expected. Whilst this rise indicates a slight worsening of the labour market, the bigger picture remains one of strength. A chart going back to the start of last year is shown below and its clear that the prevailing trend remains lower and there is nothing by the way of worries here. 

 Despite the weekly jobless claims rising, the US labour market remains a picture of strength.

Finally the Chicago Fed national index rose to 0.13 from -0.30 last time out. Expectations were high going into this release with the consensus calling for a rise of 0.35, so in light of this the reading is not as positive. Looking at the bigger picture the rebound into positive territory will be seen as a pleasing development and overall most of these surveys are at fairly high levels in historical terms. 

 The Chicago Fed national index bounced back into positive territory this afternoon, but the reading was below the consensus forecast.

The market reaction has been relatively muted with a small down tick seen in the US dollar and Gold briefly popping t its highest level of the day. The moves seen from last night’s Fed decision remain of utmost importance and Gold has now recaptured the 1260 level and in doing so has moved back above the rising trendline. If the market can remain above 1260 then further gains to 1280 and 1295 are possible. 

 Gold has risen back above 1260 to trade at a 6 week high shortly after the data releases