Gold price spiked above $1,400 as tensions between the US and Iran have escalated and US President Trump signed new sanctions against Iran after the downing of a spy drone. The US claims the drone was flying in international waters while Iran claims it entered its sovereign air space. In addition, Iran claimed that US hacking attempts against the Iranian military failed, but that it remains open to talks if the US removes sanctions. Price action in Gold accelerated to the upside as traders sought safe haven assets, but is a round of profit taking on the horizon? Today’s fundamental analysis is taking a look if the rally can extend or if traders should account for a short-term price reversal before marching higher.
Forex traders who seek a smart hedge for their portfolio should diversify their forex investment with precious metals in order to reduce their risk exposure. The US-Iran tensions add to geopolitical instability and give analysts and traders one more area of concern on top of the escalating trade war the US started with China. US President Trump and Chinese President Xi are scheduled to meet on the sidelines of the G-20 Summit in Japan this Saturday, how will Gold trade after the meeting? Traders will get key US Durable Foods Orders today which are expected to have an impact on price action. Will bulls be able to move higher due to a failed trade deal and further Iran tensions or can bears force a profit-taking pull-back?
Here are the key factors to keep in mind today for Gold trades:
- Reserve Bank of New Zealand Interest Rate Announcement: The Reserve Bank of New Zealand kept interest rates unchanged at 1.50%. Economists predicted no change in interest rates. Forex traders can compare this to Reserve Bank of New Zealand previous interest rate announcement were rates were cut by 25 basis points to 1.50%.
- German GfK Consumer Confidence Survey: The German GfK Consumer Confidence Survey for July was reported at 10.0. Economists predicted a figure of 10.0. Forex traders can compare this to the German GfK Consumer Confidence Survey for June which was reported at 10.1.
- Credit Suisse Survey Expectations: Credit Suisse Survey Expectations for June are predicted at -10.2. Forex traders can compare this to Credit Suisse Survey Expectations for May which were reported at 14.3.
- UK BBA Loans for House Purchase: UK BBA Loans for House Purchase for May are predicted at 41,000. Forex traders can compare this to UK BBA Loans for House Purchase for April which were reported at 42,989.
- US Preliminary Durable Goods Orders: US Preliminary Durable Goods Orders for May are predicted to decrease by 0.1% monthly and Durables Excluding Transportation are predicted to increase by 0.1% monthly. Forex traders can compare this to US Durable Goods Orders for April which decreased by 2.1% monthly and to Durables Excluding Transportation which were reported flat at 0.0% monthly. Capital Goods Orders Non-Defense Excluding Aircraft for May are predicted to increase by 0.1% monthly and Capital Goods Shipments Non-Defense Excluding Aircraft are predicted to decrease by 0.2% monthly. Forex traders can compare this to Capital Goods Orders Non-Defense Excluding Aircraft for April which decreased by 1.0% monthly and to Capital Goods Shipments Non-Defense Excluding Aircraft which were reported flat at 0.0% monthly.
- US Advanced Goods Trade Balance: The US Advanced Goods Trade Balance for May is predicted at -$71.9B. Forex traders can compare this to the US Advanced Goods Trade Balance for April which was reported at -$72.1B.
- US Wholesale Inventories: US Preliminary Wholesale Inventories for May are predicted to increase by 0.5% monthly. Forex traders can compare this to US Wholesale Inventories for April which increased by 0.8% monthly.
Should price action for Gold remain inside the or breakdown below the 1,403.30 to 1,411.70 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,408.00
- Take Profit Zone: 1,332.80 – 1,357.80
- Stop Loss Level: 1,439.00
Should price action for Gold breakout above 1,411.70 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,419.30
- Take Profit Zone: 1,439.00 – 1,455.60
- Stop Loss Level: 1,411.70
Open your PaxForex Trading Account now and add this commodity to your portfolio. Profitable forex trading strategies always include intelligent ways to protect open positions from unexpected events. Make sure that you are fully protected to the downside and subscribe to the PaxForex Daily Fundamental Analysis now in order to get the latest trading recommendations fresh from the desk of our analysts delivered to your inbox!
