Gold about to see a bullish stint driven by the US ISM Non-Manufacturing data?

By Admiral Markets

Source: Economic Events December 4, 2019 – Admiral Markets’ Forex Calendar

Today our main focus will be the US ISM Non-Manufacturing data set.

The last reading came in at 54.7 points for last October, from a near three-year low of 52.6 in September and above market consensus of 53.5, added to the rise in 10-year US-Treasury yields at the beginning of the month of November and drop in Gold back below 1,500 USD.

Interestingly enough, the precious metal stabilised above 1,440/450 USD, despite the rise in the USD/JPY back above 109.00, especially over the last few days.

That fueled in fact our bullish outlook for the next months. If today’s data set disappoints, we would expect a drop in 10-year US-Treasury yields, likely to result in a bullish stint in Gold.

The reason: worse than expected data on the other hand could result in rising expectations of an increasingly dovish stance from the Fed at the December 11 meeting, adding fuel to our bullish Gold outlook which is mainly driven by the fact that the Fed’s balance sheet is currently expanding at a faster rate than during QE1, QE2 or QE3.

And even if better than expected data could result in short-term bearish stints in Gold, these could be aggressively bought back and leave Gold for a push higher, since most of a ‘hawkish’ Fed is already priced into the precious metal.

With that in mind, technically our picture switches to Long again with Gold breaking back above 1,520 USD which would level the path up to the current yearly highs around 1,557 USD, a first bullish sign in the lower time-frames (H1) is already sent with Gold recapturing 1,480 USD:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between September 4, 2018, to December 3, 2019). Accessed: December 3, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of Gold fell by 1.7%, in 2015, it fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, meaning that after five years, it was up by 6.4%.

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