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Gold Monthly Fundamental Forecast – December 2015

By:
Barry Norman

Outlook and Recommendation Gold continued its decline in November having one of the worse % declines in two years and falling to lows not seen in a long

Gold Monthly Fundamental Forecast – December 2015

gold monthly bns
Outlook and Recommendation

Gold continued its decline in November having one of the worse % declines in two years and falling to lows not seen in a long time as the Fed’s prepare to raise rates. Gold entered December at 1067.20 with a loss of 6.5%. Gold rallied from oversold conditions to settle yesterday’s session at 1065.3, more than $10 from its recent low. The metal extended gains further in today’s session trading to a session high of 1074 as it ran into trend line resistance that aligns with 1072.6-1074.2 and dates back to 11/6. Pending Home Sales missed expectations yesterday and it helped an already overdone market get off the floor. Traders will look to ISM manufacturing data due out to headline the day. Jobs data kicks off tomorrow with the preliminary ADP report while the main event remains Friday’s Nonfarm Payroll number. The bulls must secure a close above new session highs in order to take out trend line resistance and keep a bid under the market. Still, above there, there is tremendous technical headwind as we as fundamental headwind in the form of a Fed rate hike in the coming weeks. The bears look to secure a close back below 1062-1062.8 in order to signal a failure.

With the Fed expected to reduce interest rates towards the end of the month, gold is expected to continue to decline. It’s been almost 50 months since the gold traded at the dizzy heights of $1900/oz. back in August 2011, to the delight of every gold bug on the planet. However, since then it has been a slow grind south with rally after rally proving to be just another head fake. Gold has now lost $845.00 or 44.47% of its value in dollar terms, since peaking back then.

The steep drop in prices demonstrates that market players have very limited interest in gold. Investors are understandably cautious as the dollar remains well supported by expectations that the Federal Reserve is set to raise interest rates before the end of the year. Fed officials have been emphasizing that it will soon be appropriate to begin a new policy phase, if the data and the outlook justify such a move. Traders will be eyeing key U.S. economic data closely, particularly the highly anticipated non-farm payrolls report on Friday, to speculate on the timing. However, I think the most important question is: how much of a liftoff in December is already factored in?

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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Major Economic Events That Will Affect The Markets In December

 

Cur.

   

Event

 

 

 

 

 

Tuesday, December 1, 2015

 

  CNY

 

Manufacturing PMI (Nov)

 

 

 

 

 

 

  CNY

 

Caixin Manufacturing PMI (Nov)

 

 

 

 

 

 

  AUD

 

Interest Rate Decision (Dec)

 

 

 

 

 

 

  AUD

 

RBA Rate Statement  

 

 

 

 

 

 

  EUR

 

German Manufacturing PMI

 

 

 

 

 

 

  EUR

 

German Unemployment Change

 

 

 

 

 

 

  GBP

 

BoE Gov. Carney Speaks  

 

 

 

 

 

 

  GBP

 

Manufacturing PMI (Nov)

 

 

 

 

 

 

  USD

 

ISM Manufacturing PMI (Nov)

 

 

 

 

 

Wednesday, December 2, 2015

 

  AUD

 

GDP (QoQ) (Q3)

 

 

 

 

 

 

  GBP

 

Construction PMI (Nov)

 

 

 

 

 

 

  EUR

 

CPI (YoY) (Nov)  

 

 

 

 

 

 

  USD

 

ADP Nonfarm

 

 

 

 

 

 

  USD

 

Fed Chair Yellen Speaks  

 

 

 

 

 

Thursday, December 3, 2015

 

  GBP

 

Services PMI (Nov)

 

 

 

 

 

 

  EUR

 

Interest Rate Decision

 

 

 

 

 

 

  EUR

 

ECB Press Conference  

 

 

 

 

 

 

  USD

 

Yellen Testifies  

 

 

 

 

 

Friday, December 4, 2015

 

  AUD

 

Retail Sales (MoM) (Oct)

 

 

 

 

 

 

  USD

 

Nonfarm Payrolls (Nov)

 

 

 

 

 

 

  USD

 

Unemployment Rate

 

 

 

 

 

 

  EUR

 

ECB President Draghi 

 

 

 

 

 

Tuesday, December 8, 2015

 

  CNY

 

Trade Balance (Nov)

 

 

 

 

 

 

  GBP

 

Manufacturing Product

 

 

 

 

 

Wednesday, December 9, 2015

 

  CNY

 

CPI (YoY) (Nov)

 

 

 

 

 

 

  NZD

 

Interest Rate Decision

 

 

 

 

 

Thursday, December 10, 2015

 

  AUD

 

Employment Change

 

 

 

 

 

 

  GBP

 

Interest Rate Decision

 

 

 

 

 

Friday, December 11, 2015

 

  USD

 

Core Retail Sales (MoM)

 

 

 

 

 

 

  USD

 

PPI (MoM) (Nov)

 

 

 

 

 

 

  USD

 

Retail Sales (MoM) (Nov)

 

 

 

 

 

Saturday, December 12, 2015

 

  CNY

 

Industrial Production

 

 

 

 

 

Sunday, December 13, 2015

 

  JPY

 

Tankan Large

 

 

 

 

 

 

  JPY

 

Tankan Large Non-

 

 

 

 

 

Tuesday, December 15, 2015

 

  GBP

 

CPI (YoY) (Nov)

 

 

 

 

 

 

  EUR

 

German ZEW Economic

 

 

 

 

 

Wednesday, December 16, 2015

 

  EUR

 

German Manufacturing

 

 

 

 

 

 

  GBP

 

Claimant Count Change

 

 

 

 

 

 

  EUR

 

CPI (YoY) (Nov)

 

 

 

 

 

 

  USD

 

Fed Interest Rate

 

 

 

 

 

 

  NZD

 

GDP (QoQ) (Q3)

 

 

 

 

 

Thursday, December 17, 2015

 

  EUR

 

German Ifo Business

 

 

 

 

 

 

  GBP

 

Retail Sales (MoM) (Nov)

 

 

 

 

 

Thursday, December 24, 2015

All Day

 

Holiday

Germany – Christmas Eve

 

 

Holiday

United States – Christmas Eve – Early close at 13:30

                     

 

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