News and Data:
- CNY Caixin Manufacturing PMI 51.5 vs 51.7 expected
- US ISM Manufacturing PMI 47.2 vs 49 expected
- US fomc Meeting Minutes expected to cut interest rate 2 times in 2020
- US ISM Non-Manufacturing PMI 55 vs 54.5 expected
Market Update:
gold price jumped over $1,600 per ounce this morning upon the news that AL Asad airbase in western Iraq has come under retaliatory attack from Iran. This action is viewed as the direct attack on American forces located in the region. Following the news of the attack, stocks prices dropped but oil and GOLD rose. Gold has bounced back around $1,586 as the situation subsided. However, traders are still reassessing the situation and in waiting for U.S President Mr. Donald trump to address the media whether or not United States will response to the attack on AL Asad airbase in western
Iraq and US-Iran war risks.
The relation between North Korea and the USA is getting soured over the past few months that could possibly lead to Korea testing more missile, which threatens the world security. Gold is considered as a safe heaven when there is war.
Furthermore, the market is watching the second phase of US-China Trade Deal, of which the trade agreement to be signed in a few weeks. If the second phase of US- China Trade Deal fails, the market would react negatively to toward the usd, which push gold price even higher.
In addition, gold price has a tendency to increase when it is nearly time for Lunar New Year as the demand for gold is high during that time.
Technical analysis:
Gold breaks weekly resistant 1600 and could possibly move to the next resistant 1700 as the war between the USA and Iran heating up and other factors are also contributed to the gold price increase. The bullish momentum for gold is still strong; therefore, traders are recommended to buy gold retracement only.
Upcoming Events:
- January 08: US ADP Non-Farm Employment Change
- January 10: US Non-Farm Employment Change
- January 14: US CPI M/M and US Core CPI M/M