In August, Austria’s industrial production dropped by 1.7% compared to last year. This is a decline from the previous month, which saw a decrease of 0.8%. FXStreet, a financial news service, offers various insights and forecasts about the market. Gold prices are climbing towards $4,100 due to worries about economic growth and expectations of a Federal Reserve interest rate cut.

Cryptocurrency Rebound

Cryptocurrencies such as Bitcoin, Ethereum, and Ripple have bounced back from important support levels. This indicates possible further recovery as momentum shows a weakening bearish trend. FXStreet stresses the need for personal research before making any investment choices, highlighting potential risks. They also clarify that their information is not direct investment advice or recommendations. The market clearly believes the Federal Reserve will lower interest rates in December. This belief is supported by weak US economic data, with the latest job report for October showing only a gain of 95,000 non-farm jobs, far below what was expected. The likelihood of a rate cut is now over 85% for the next meeting, creating significant pressure on the US Dollar. This expectation is influencing major currency pairs, making bets on a weaker dollar appealing in the coming weeks. For instance, we see EUR/USD rising above 1.1550 as traders expect the interest rate gap between the US and Europe to narrow. This trend makes selling US dollars against a variety of currencies a key strategy right now.

Focus on Gold

Gold is gaining attention, trading close to $4,100 an ounce, benefiting from global growth concerns and anticipated lower US interest rates. This price exceeds previous highs from the inflationary period of 2023-2024, indicating a strong move toward safety. Traders should consider long positions or call options on gold, as a confirmed Fed pivot could drive prices even higher. However, caution is necessary regarding the European economy, which shows signs of real weakness that contrast with optimism in the US market. Austria’s industrial production has dropped to -1.7% year-on-year, and this isn’t unique; Germany’s manufacturing PMI has been in contraction for five straight months. This suggests that while the euro may strengthen against the dollar, it could be weak against other currencies. Despite an optimistic market sentiment surrounding the potential for lower rates, risks remain. Some view the AI-driven stock rally as a bubble, and its durability could be in jeopardy if economic conditions worsen significantly. We are also seeing a recovery in riskier assets like Bitcoin, indicating a current appetite for risk, but this could reverse quickly if the Fed fails to meet expectations for a rate cut. Create your live VT Markets account and start trading now.

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