Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Japanese BSI Large Manufacturing Conditions for the fourth quarter came in at 5.7. Economists predicted a reading of 5.6. Forex traders can compare this to Japanese BSI Large Manufacturing Conditions for the third quarter, reported at 5.4.
Japanese Money Stock M2 for November increased by 2.3% annualized, and Japanese M3 Money Supply came in at ¥2,121.5T. Forex traders can compare this to Japanese Money Stock M2 for October, which rose by 2.4% annualized, and Japanese M3 Money Supply, reported at ¥2,118.2T.
UK Rightmove House Prices for November decreased by 2.1% monthly. Forex traders can compare this to UK Rightmove House Prices for October, which contracted 1.7% monthly.
Japanese Preliminary Machine Tool Orders for November dropped by 13.6% annualized. Forex traders can compare this to Japanese Machine Tool Orders for October, which plunged by 20.6% annualized.
Gold jumped to an all-time high on December 4th, from where it retreated to test the key psychological support level at 2,000. Markets believe that the US Federal Reserve concluded its interest rate increases, which drove the US Dollar higher over the past 12+ months. Gold and the US Dollar often show an inverse relationship, and as the US Dollar faces selling pressure, it provides one upside catalyst for gold.
The potential for stagflation next year adds another driver for price action, followed by geopolitical tensions. The combination of the three factors should provide sufficient bullish momentum to drive gold past 2,200 in 2024. Inflation pulled back from 40+ year peaks, but the threat of inflation remains, which could stick above 3.0 annualized and keep central banks from lowering interest rates while the economy stagnates.
The forecast for gold remains bullish after this precious metal retreated from a fresh all-time high above 2,145. After a bullish crossover, the Kijun-sen and the Tenkan-sen flatlined, suggesting a potential volatility rise as bulls and bears wrestle for control over the next move. Adding to the upside momentum is the ascending Ichimoku Kinko Hyo Cloud, with the Senkou Span A and Senkou Span B moving higher. Traders should also monitor the CCI following its double breakdown from extreme overbought territory and below zero. This technical indicator could drift lower but record a higher low, and a reversal may trigger the next advance. Can bulls regain control over gold and pressure price action into its horizontal resistance area and a new all-time high? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for XAU/USD remain inside the or breakout above the 1,978.00 to 2,010.00 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,998.00
- Take Profit Zone: 2,145.00 – 2,200.00
- Stop Loss Level: 1,940.00
Should price action for XAU/USD breakdown below 1,978.00, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,940.00
- Take Profit Zone: 1,880.00 – 1,910.00
- Stop Loss Level: 1,978.00
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