The price of Gold is marching higher as trade tensions are escalating between the US and China. Following the announcement of new tariffs by the US, China has pulled out of the US agricultural market in a precision strike against Trump’s economic aggression. Trade tensions are only expected to worsen from here with some analysts pointing out that President Trump needs to get the trade war going as it boosts his political capital with the base of the Republican voters. How much more upside does Gold possess? Subscribe to the PaxForex Daily Fundamental Analysis today where you can grow your balance trade-by-trade.
Economic data around the globe is pointing towards a steeper slowdown than many economists anticipated. The US-China trade war is not the only one brewing as Japan and South Korea are locked into an escalating trade war of their own. As the global economy is inching closer to a recession, is now the time to hedge your forex portfolio with Gold? Today’s fundamental analysis will explore how much more upside this precious metal has left and what the downside risks are.
Here are the key factors to keep in mind today for Gold trades:
- New Zealand QV House Prices: New Zealand QV House Prices for July increased by 2.2% annualized. Forex traders can compare this to New Zealand QV House Prices for June which increased by 2.0% annualized.
- Australian AiG Performance of Construction Index: The Australian AiG Performance of Construction Index for July was reported at 39.1. Forex traders can compare this to the Australian AiG Performance of Construction Index for June which was reported at 43.0.
- Japanese Official Reserve Assets: Japanese Official Reserve Assets for July were reported at $1,316.5B. Forex traders can compare this to Japanese Official Reserve Assets for June which were reported at $1,322.3B.
- Australian Home Loans and Investment Lending: Australian Home Loans for June increased by 0.4% monthly. Economists predicted an increase of 0.5% monthly. Forex traders can compare this to Australian Home Loans for May which decreased by 0.4% monthly. Australian Investment Lending for June increased by 0.5% monthly and the Owner-Occupier Loan Value increased by 2.4% monthly. Economists predicted an increase of 0.5% and a decrease of 1.0%. Forex traders can compare this to Australian Investment Lending for May which decreased by 1.9% monthly and to Owner-Occupier Loan Value which decreased by 3.0% monthly.
- Reserve Bank of New Zealand Interest Rate Announcement: The Reserve Bank of New Zealand cut interest rates by 50 basis points to 1.00%. Economists predicted a 25 basis point interest rate cut to 1.25%. Forex traders can compare this to Reserve Bank of New Zealand previous interest rate announcement were rates remained unchanged at 1.50%.
- German Industrial Production: German Industrial Production for June decreased by 1.5% monthly and by 5.2% annualized. Economists predicted a decrease of 0.5% monthly and of 3.1% annualized. Forex traders can compare this to German Industrial Production for May which increased by 0.3% monthly and which decreased by 3.7% annualized.
- Swiss UBS Real Estate Bubble Index: The Swiss UBS Real Estate Bubble Index for the second-quarter was reported at 0.78. Forex traders can compare this to the Swiss UBS Real Estate Bubble Index for the first-quarter which was reported at 0.80.
- French Trade Balance and French Current Account Balance: The French Trade Balance for June is predicted at -€4.00B. Forex traders can compare this to the French Trade Balance for May which was reported at -€3.30B. The French Current Account Balance for June is predicted at -€0.56B. Forex traders can compare this to the French Current Account Balance for May which was reported at €0.30B.
- UK Halifax House Price Index: The UK Halifax House Price Index for July is predicted to increase by 0.3% monthly and by 4.4% tri-monthly annualized. Forex traders can compare this to the UK Halifax House Price Index for June which decreased by 0.3% monthly and which increased by 5.7% tri-monthly annualized.
- Chinese FX Reserves: Chinese FX Reserves for July are predicted at $3.110T. Forex traders can compare this to Chinese FX Reserves for June which were reported at $3.119T.
- Canadian Ivey PMI: The Canadian Ivey PMI for July is predicted at 53.0. Forex traders can compare this to the Canadian Ivey PMI for June which was reported at 52.4.
- US Consumer Credit: US Consumer Credit for June is predicted at $16.500B. Forex traders can compare this to US Consumer Credit for May which was reported at $17.086B.
Should price action for Gold remain inside the or breakout above the 1,472.00 to 1,489.90 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,485.50
- Take Profit Zone: 1,590.10 – 1,619.85
- Stop Loss Level: 1,456.50
Should price action for Gold breakdown below 1,472.00 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,452.50
- Take Profit Zone: 1,357.80 – 1,381.60
- Stop Loss Level: 1,485.50
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