Forex Today: Gold Close to Record High

Gold earlier today reached a new 6-month high price above $2,050 not far from its record high around $2,070.

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  1. Gold has made a bullish breakout to a new 6-month high above $2,050 per ounce and is threatening to reach its all-time high at about $2,070, attracting trend traders on the long side. Its volatility is low relatively low. However, the past few hours have seen the previous metal make a bearish retracement.
  2. The US Dollar Index has reached a new 3-month low, with the EUR/USD currency pair trading above $1.1000 and GBP/USD trading above $1.2700. The long-term bearish trend in the US Dollar is the key driver in the Forex market, pushed by growing sentiment that the Federal Reserve has ended its current tightening cycle, and will begin to cut rates. Since the Tokyo open, the New Zealand Dollar has been the strongest major currency, while the US Dollar has been the weakest, putting the NZD/USD currency pair in focus.
  3. The Reserve Bank of New Zealand agreed at its policy meeting a few hours ago to leave interest rates unchanged at 5.50%. However, the Bank suggested it may need to continue hiking rates in the bear term, and this is giving the Kiwi a boost.
  4. Australian inflation data has come in lower than expected, falling to an annualized rate of only 4.9% compared to the 5.2% which was widely expected. This has caused the Aussie to weaken somewhat.
  5. The NASDAQ 100 Index and other major stock indices are mostly consolidating. The NASDAQ 100 Index reached a new 22-month high price last week. Trend traders and day traders will be interested in being involved on the long side, with bulls getting a tailwind from lower-than-expected US inflation data recently.
  6. Cocoa futures are continuing to rise strongly and closed yesterday at a new multi-year high. This commodity will be very interesting to trend traders on the long side.
  7. There will be releases later today of US Preliminary GDP data and Chinese Manufacturing PMI numbers.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.