Gold prices extended their sharp rally and the breakout above the psychological $1,500 mark has further enhanced bullish sentiment. Economic data out of Asia offered more recession signals for the global economy. The New Zealand Business Manufacturing PMI slid into contractionary territory below 50 with a downward revision to the previous month. While the Singapore trade surplus for July came in higher than expected, on an annualized basis it is contracting with non-oil exports slumping. The Hong Kong riots are also darkening the overall economic outlook for Asian economies. Will gold be able to extend its rally? This morning’s fundamental analysis will take a look at the next resistance level for this precious metal as well as the downside risk for a potential short-term sell-off due to profit taking.

Trade data out of the Eurozone will be next for forex traders and economists expect the surplus to shrink as global trade is slowing. The US inverted yield curve is flashing a recession signal for the US with German banks amongst the Eurozone weakest financial institutions. Housing data out of the US is anticipated to show a recovery after an overall weak year, but consumers extended their purchases as indicated by yesterday’s retail sales data. Consumer confidence data will offer the final economic data point for this trading week. How will this impact price action in Gold? Subscribe to the PaxForex Daily Fundamental Analysis and join our fast growing community of profitable forex traders!