Gold prices accelerated as tensions in the Middle East increased following yesterday’s attack on two oil tankers in the Gulf of Oman which lies at the entrance of the Persian Gulf. Roughly 40% of the planet’s seaborne oil traverse this area. The US was quick to blame Iran for the attacks while Iran denies any involvement. US Secretary of State Pompeo read a short statement which blamed Iran, offered no evidence and didn’t take any questions. Will the spike in Gold prices and Middle East tensions impact your online forex trading?
Both tankers carried cargo bound for Japan at a time Japanese Prime Minister Abe is on a rare diplomatic mission to Iran. US officials acknowledged that the tankers were attacked by mines, but could confirm if the mines were indeed from Iran. The reason the US shifted blame to Iran was that they had no better explanation for the incidents. Only hours after Pompeo stated “The United States will defend its forces, interests and stand with our partners and allies to safeguard global commerce and regional stability.”, US Central Command countered his aggressive tone by noting “A war with Iran is not in our strategic interest, nor in the best interest of the international community.”
Iran denies and condemns the attacks as well as the US accusations. Foreign Minister Javad Zarif tweeted “Suspicious doesn’t begin to describe what likely transpired”, while the Iranian envoy issued a statement echoing the message. Will Gold extend its rally and complete a breakout above its next resistance level? Aside from the rise in tensions in the Middle East and between the US and Iran, here are economic developments which could impact today’s fundamental analysis of this precious metal.
Here are the key factors to keep in mind today for Gold trades:
- New Zealand REINZ House Sales: New Zealand REINZ House Sales for May decreased by 7.8% annualized. Forex traders can compare this to New Zealand REINZ House Sales for April which decreased by 11.5% annualized.
- New Zealand Business Manufacturing PMI: The New Zealand Business Manufacturing PMI for May was reported at 50.2. Forex traders can compare this to the New Zealand Business Manufacturing PMI for April which was reported at 52.7.
- New Zealand Food Prices: New Zealand Food Prices for May increased by 0.7% monthly. Forex traders can compare this to New Zealand Food Prices for April which decreased by 0.1% monthly.
- Japanese Industrial Production and Capacity Utilization: Final Japanese Industrial Production for April increased by 0.6% monthly and decreased by 1.1% annualized. Forex traders can compare this to previous Japanese Industrial Production for April which increased by 0.6% monthly and which decreased by 1.1% annualized. Capacity Utilization for April increased by 1.6% monthly. Forex traders can compare this to Capacity Utilization for March which decreased by 0.4% monthly.
- German Wholesale Price Index: The German Wholesale Price Index for May increased by 0.3% monthly and by 1.6% annualized. Forex traders can compare this to the German Wholesale Price Index for April which increased by 0.6% monthly and by 2.1% annualized.
- Preliminary French CPI: The Preliminary French CPI for May is predicted to increase by 0.2% monthly and by 1.0% annualized. Forex traders can compare this to the French CPI for April which increased by 0.2% monthly and by 1.0% annualized.
- Chinese Industrial Production: Chinese Industrial Production for May is predicted to increase by 5.4% annualized. Forex traders can compare this to Chinese Industrial Production for April which increased by 5.4% annualized.
- Chinese Retail Sales: Chinese Retail Sales for May are predicted to increase by 8.1% annualized. Forex traders can compare this to Chinese Retail Sales for April which increased by 7.2% annualized.
- Chinese Fixed Assets ex Rural: Chinese Fixed Assets ex Rural for May increased by 6.1% annualized. Forex traders can compare this to Chinese Fixed Assets ex Rural for April which increased by 6.1% annualized.
- Chinese Surveyed Jobless Rate: The Chinese Surveyed Jobless Rate for May is predicted at 5.0%. Forex traders can compare this to the Chinese Surveyed Jobless Rate for April which was reported at 5.0%.
- Italian CPI: The Italian CPI for May is predicted to increase by 0.1% monthly and by 0.9% annualized. Forex traders can compare this to the German PPI for April which increased by 0.1% monthly and by 0.9% annualized.
- US Advanced Retail Sales: US Advanced Retail Sales for May are predicted to increase by 0.7% monthly and Retail Sales Less Autos are predicted to increase by 0.4% monthly. Forex traders can compare this to US Advanced Retail Sales for April which decreased by 0.2% monthly and to Retail Sales Less Autos which increased by 0.1% monthly. Retail Sales Less Autos and Gas for May are predicted to increase by 0.4% monthly and Retail Sales Control Group are predicted to increase by 0.4% monthly. Forex traders can compare this to Retail Sales Less Autos and Gas for April which decreased by 0.2% monthly and to Retail Sales Control Group which were reported flat at 0.0% monthly.
- US Industrial Production and Manufacturing Production: US Industrial Production for May is predicted to increase by 0.2% monthly and Manufacturing Production is predicted to increase by 0.2% monthly. Forex traders can compare this to US Industrial Production for April which decreased by 0.5% monthly and to Manufacturing Production which decreased by 0.5% monthly. Capacity Utilization for May is predicted at 78.0%. Forex traders can compare this to Capacity Utilization for April which was reported at 77.9%.
- US Michigan Consumer Sentiment: Preliminary US Michigan Consumer Sentiment for June is predicted at 98.0. Forex traders can compare this to US Michigan Consumer Confidence for May which was reported at 100.0. Preliminary Current Conditions for June are expected at 109.0 and Preliminary Expectations are predicted at 92.0. Forex traders can compare this to Current Conditions for June which were reported at 110.0 and to Expectations which were reported at 93.5.
- US Business Inventories: US Business Inventories for April are predicted to increase by 0.4% monthly. Forex traders can compare this to US Business Inventories for March which were reported flat at 0.0% monthly.
Should price action for Gold remain inside the or breakout above the 1,339.55 to 1,355.40 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,345.00
- Take Profit Zone: 1,365.80 – 1,388.40
- Stop Loss Level: 1,336.20
Should price action for Gold breakdown below 1,339.55 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,332.20
- Take Profit Zone: 1,319.65 – 1,325.10
- Stop Loss Level: 1,339.55
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