Gold tries to break resistance as U.S. durable-goods miss expectations

Gold prices are attempting to break resistance around the $1,495 an ounce level after newly released data showed that orders for long-lasting U.S. factory goods were down 1.1% in September, coming in below expectations.
Market consensus was calling for a 0.5% decline. The monthly drop in durable-goods orders equaled to $2.8 billion. Meanwhile, August’s data was upwardly revised to an increase of 0.3%, the Commerce Department said Thursday.
Following the release, gold prices edged up with December Comex gold futures last trading at $1,496.80, up 0.07% on the day.

The core durable goods section, which excludes volatile transportation sector, was down 0.3% in September. Excluding defense, new orders fell 1.2%.
The government’s durables report covers items with an expected life of at least three years, such as kitchen appliances, computers, furniture, autos and airplanes.
Even though spending on durable goods represents a small part of American economic output, economists carefully watch for any changes as a sign of where the economy might be heading.
Looking at the report, analysts pointed out that this softness is the reason why the Federal Reserve is likely to cut rates once again next week.
“September had some disorderly conditions that impacted the durable goods orders report, so there are at least some excuses for its weak results. A strike at GM, and a troubled jet, may have contributed to declines in both aircraft and vehicle/parts orders, but core capital goods orders also looked soft,” said CIBC Capital Markets chief economist Avery Shenfeld. “The weakness in capital spending [is] a key reason why Fed speakers seem to be leaning to easing in October rather than, as seemed the case after the prior meeting, taking a wait-and-see pause for a while.”

By Anna Golubova