The Commodity Futures Trading Commission (CFTC) has reported a significant rise in US net positions in gold, jumping to $1,766,000 from $232,000. This increase comes as global economic changes are impacting various currencies. The NZD/USD has improved, reaching nearly 0.5750. This rise is supported by positive data from China’s Purchasing Managers’ Index (PMI) and speculation about a potential rate cut by the Federal Reserve. Meanwhile, the Australian dollar is holding near a three-week high against the US dollar, despite disappointing GDP figures.

China Economic Indicators

In China, the Ratingdog Services PMI fell to 52.1 in November, slightly below the expected 52. The People’s Bank of China set the USD/CNY reference rate at 7.0754, down from the prior rate of 7.0794. Gold prices have slipped back to around $4,200 as traders take profits before the upcoming US employment and services data. Additionally, Bitcoin has increased slightly to over $87,000 due to current market conditions and expectations of changes in monetary policy by the Bank of Japan (BoJ). The White House is preparing for potential Supreme Court rulings that might overturn certain tariffs, although exporters are likely to face continued tariff impacts as part of the economic strategy.

Gold and Currency Expectations

There is a significant shift in sentiment towards gold, with speculative long positions soaring more than sevenfold. This suggests a strong belief that current prices above $4,200 per ounce will rise further. A weaker US Dollar is making gold more appealing to traders using other currencies. The expectation of a Federal Reserve rate cut this month is strengthening. Futures markets now indicate an over 85% chance of another cut at the next meeting, following last month’s data showing slowed job growth and inflation dropping to a 2.8% annual rate. Thus, we can expect ongoing pressure on the US Dollar against major currencies. This scenario is favorable for the Euro, which is edging closer to the 1.1650 mark as market sentiment becomes more positive. Despite a weak GDP report from Australia last quarter, the Australian Dollar is also showing resilience against the US Dollar. Traders should keep an eye on these pairs for potential gains as long as bets on Fed rate cuts continue. However, be prepared for possible volatility this week. Upcoming ADP employment and ISM Services PMI data could shift the current trend. A surprisingly strong report might lead to a swift adjustment in Fed forecasts, causing the dollar to rebound sharply and triggering profit-taking in gold. In higher-risk asset classes, Bitcoin is trying to break its downtrend above $87,000, likely supported by the same liquidity expectations driving other markets. A sustained upward movement could signal a larger shift in momentum for crypto traders. Create your live VT Markets account and start trading now.

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