Conflicting messages by US President Donald Trump and out of China have sowed more confusion about the state of the US-China trade war. While so called technical phone calls between both negotiating teams are common practice, Trump has claimed that a high level request has been made in order to resume trade talks. This has increased the layer of uncertainty for forex traders, but boosted demand for gold which continues to extend its stellar advance. Global economic data continues to disappoint and so far this week has added to weaker-than-expected data around the world, most notable the German IFO data as well as US durable goods order excluding the volatile transportation sector. How much further can the rally in gold extend? Subscribe to the PaxForex Daily Fundamental Analysis and find out now!
Chinese industrial profits rebounded, but final German GDP data for the second-quarter is expected to confirm the contraction which was reported before. A trio of reports on the health of the US housing sector will gather attention today and so is the reading on consumer confidence. US consumers have proven resilient in the wake of the trade war and a slowing economy. Will this trend continue and how much more can the US consumer borrow in order to support the economy? As a perfect economic storm is brewing, should forex traders add more gold to their portfolios? Today’s fundamental analysis will take a look at the upside potential in this precious metal and weigh the downside risk.
Here are the key factors to keep in mind today for Gold trades:
- Australian ANZ Roy Morgan Weekly Consumer Confidence Index: The Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of August 25th was reported at 114.1. Forex traders can compare this to the Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of August 18th which was reported at 112.8.
- Japanese Corporate Service Price Index: The Japanese Corporate Service Price Index for July increased by 0.5% annualized. Economists predicted an increase of 0.6% annualized. Forex traders can compare this to the Japanese Corporate Service Price Index for June which increased by 0.7% annualized.
- Chinese Industrial Profits: Chinese Industrial Profits for July increased by 2.6% annualized. Forex traders can compare this to Chinese Industrial Profits for June which decreased by 3.1% annualized.
- German GDP: The Final German GDP for the second-quarter is predicted to decrease by 0.1% quarterly and to increase by 0.4% annualized. Forex traders can compare this to the previous second-quarter German GDP report which decreased by 0.1% quarterly and which increased by 0.4% annualized. German Private Consumption for the second-quarter is predicted to increase by 0.2% quarterly. Forex traders can compare this to first-quarter German Private Consumption which increased by 1.2% quarterly. German Government Spending for the second-quarter is predicted to increase by 0.4% quarterly. Forex traders can compare this to first-quarter German Government Spending which decreased by 0.3% quarterly. German Capital Investment for the second-quarter is predicted to increase by 0.1% quarterly. Forex traders can compare this to first-quarter German Capital Investment which increased by 1.1% quarterly.
- French Business Survey: The French Business Survey for August is predicted at 101. Forex traders can compare this to the French Business Survey for July which was reported at 101.
- French Consumer Confidence: French Consumer Confidence for August is predicted at 102. Forex traders can compare this to French Consumer Confidence for July which was reported at 102.
- UK BBA Loans for House Purchase: UK BBA Loans for House Purchase for July are predicted at 42,854. Forex traders can compare this to UK BBA Loans for House Purchase for June which were reported at 42,653.
- US House Price Index and US House Price Purchase Index: The US House Price Index for June is predicted to increase by 0.2% monthly and the US House Price Purchase Index for the second-quarter is predicted to increase by 0.2% quarterly. Forex traders can compare this to US House Price Index for May which increased by 0.1% monthly and and to the US House Price Purchase Index for the first-quarter which increased by 1.1% quarterly.
- US S&P/Case-Shiller Composite 20: The US S&P/Case-Shiller Composite 20 for June is predicted to increase by 0.10% monthly and by 2.40% annualized. Forex traders can compare this to the US S&P/Case-Shiller Composite 20 for May which increased by 0.14% monthly and by 2.39% annualized.
- US Richmond Fed Manufacturing Index: The US Richmond Fed Manufacturing Index for August is predicted at -4. Forex traders can compare this to the US Richmond Fed Manufacturing Index for July which was reported at -12.
- US Consumer Confidence: US Consumer Confidence for August is predicted at 129.0. Forex traders can compare this to US Consumer Confidence for July which was reported at 135.7.
Should price action for Gold remain inside the or breakout above the 1,519.20 to 1,540.75 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,528.00
- Take Profit Zone: 1,590.10 – 1,619.85
- Stop Loss Level: 1,510.10
Should price action for Gold breakdown below 1,519.20 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,510.10
- Take Profit Zone: 1,474.65 – 1,479.80
- Stop Loss Level: 1,519.20
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio. Forex trading is not only about earning pips, but also about protecting them. Gold is one of the most widely used hedges in the forex market, find out how to use it properly by joining PaxForex today!
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