Gold is flat on Monday, as the spot price stands at $1304.37 in the European session. On the release front, it's a quiet day, highlighted by Pending Home Sales.
In the US, a mostly positive week ended on a high note, as durable goods data exceeded expectations. Core Durable Goods Orders jumped 0.8%, beating the estimate of 0.6%, and rebounding nicely from a decline of 0.1% in May. Durable Goods Orders followed suit, posting a gain of 0.7%, compared to a weak reading of -1.0% last month. This easily surpassed the estimate of 0.4%. Earlier last week, Unemployment Claims tumbled, as the key indicator fell to 284 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 310 thousand. The strong release continues a string of solid employment data, which has helped the dollar. As well, positive news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.
Gold prices are sensitive to geopolitical events, and there are two hotspots that could affect prices in a hurry if the current situation deteriorates. In the Ukraine, tensions remain high after the downing of a Malaysian jetliner, and sporadic fighting continues between pro-Russian separatists and Ukrainian forces. On the weekend, the US accused Russia of firing on Ukrainian positions from its territory. The second trouble spot is in Gaza, as fighting rages between Hamas and Israel. The fighting has continued for over three weeks, and the US is intensifying efforts to halt the violence, which has proven to be a monumental task, as numerous ceasefires have been declared and broken.
XAU/USD 1304.37 H: 1309.27 L: 1301.28
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