Gold Nears 7-Week High

A leading gauge of US manufacturing activity fell from a near three-year high in July amidst tepid new orders, while consumer spending remained largely unchanged in the prior month.  Apart from implying economic expansion remained moderate during the third quarter, it further decreased the odds of a Fed rate increase. According to the Chicago Mercantile Exchange’s FedWatch tool, the probability of another quarter-point rate rise before year end has been slashed to around 42.50%, compared with a 50.60% likelihood, a month ago.

Gold is typically inversely related to US interest rates as higher rates dull the appeal of the non-yielding metal in favour of interest-bearing assets. XAUUSD was last seen around the $1266 per ounce-mark, with strong overhead resistance at $1275.  Bullion is likely to remain range bound until Friday's all-important US jobs report.

Apple delivered strong fiscal third quarter results and signalled its upcoming 10th-anniversary iPhone was on schedule, lifting shares 6.30% in after-hours trading on Tuesday. The tech giant reported adjusted earnings of $1.67 per share, easily topping the consensus Wall Street estimate of $1.57 per share. Revenue came in at $45.40 billion versus the average analysts’ estimate of $44.89 billion.

Third quarter iPhone sales increased 1.60% to 41.03 million, above estimates of 40.70 million units for the period. Apple is widely tipped to include higher-resolution OLED screens in its latest iPhone, slated for release in September. The company forecast total sales of between $49.00 billion and $52.00 billion for the fourth quarter. Apple's fourth quarter numbers generally include first-weekend sales of its latest devices. After ending Tuesday cash equity session at $149.95, shares surged to $159.50 following the earnings announcement.