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 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.
Major Economic Events That Will Affect The Markets In December
Cur. |
Event |
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Tuesday, December 1, 2015 |
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CNY |
Manufacturing PMI (Nov) |
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CNY |
Caixin Manufacturing PMI (Nov) |
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AUD |
Interest Rate Decision (Dec) |
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AUD |
RBA Rate Statement |
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EUR |
German Manufacturing PMI |
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EUR |
German Unemployment Change |
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GBP |
BoE Gov. Carney Speaks |
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GBP |
Manufacturing PMI (Nov) |
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USD |
ISM Manufacturing PMI (Nov) |
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Wednesday, December 2, 2015 |
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AUD |
GDP (QoQ) (Q3) |
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GBP |
Construction PMI (Nov) |
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EUR |
CPI (YoY) (Nov) |
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USD |
ADP Nonfarm |
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USD |
Fed Chair Yellen Speaks |
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Thursday, December 3, 2015 |
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GBP |
Services PMI (Nov) |
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EUR |
Interest Rate Decision |
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EUR |
ECB Press Conference |
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USD |
Yellen Testifies |
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Friday, December 4, 2015 |
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AUD |
Retail Sales (MoM) (Oct) |
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USD |
Nonfarm Payrolls (Nov) |
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USD |
Unemployment Rate |
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EUR |
ECB President Draghi |
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Tuesday, December 8, 2015 |
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CNY |
Trade Balance (Nov) |
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GBP |
Manufacturing Product |
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Wednesday, December 9, 2015 |
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CNY |
CPI (YoY) (Nov) |
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NZD |
Interest Rate Decision |
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Thursday, December 10, 2015 |
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AUD |
Employment Change |
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GBP |
Interest Rate Decision |
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Friday, December 11, 2015 |
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USD |
Core Retail Sales (MoM) |
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USD |
PPI (MoM) (Nov) |
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USD |
Retail Sales (MoM) (Nov) |
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Saturday, December 12, 2015 |
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CNY |
Industrial Production |
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Sunday, December 13, 2015 |
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JPY |
Tankan Large |
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JPY |
Tankan Large Non- |
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Tuesday, December 15, 2015 |
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GBP |
CPI (YoY) (Nov) |
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EUR |
German ZEW Economic |
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Wednesday, December 16, 2015 |
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EUR |
German Manufacturing |
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GBP |
Claimant Count Change |
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EUR |
CPI (YoY) (Nov) |
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USD |
Fed Interest Rate |
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NZD |
GDP (QoQ) (Q3) |
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Thursday, December 17, 2015 |
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EUR |
German Ifo Business |
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GBP |
Retail Sales (MoM) (Nov) |
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Thursday, December 24, 2015 |
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All Day |
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Holiday |
Germany – Christmas Eve |
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Holiday |
United States – Christmas Eve – Early close at 13:30 |
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