September 03, 2025
Gold successfully completed a six-day rally yesterday, breaking through $3,500 an ounce with absolutely no resistance. The precious metal continued to push higher still this morning in the Asian session, pushing as high as $3,547 at one point. Silver meanwhile came within touching distance of $41 earlier today. September has historically been the worst month for US stock performance and as superstitious as Wall Street can be, it is little wonder that traders are looking for other avenues of investment. Late summer woes are only one part of the explanation however, as a number of factors are contributing to the thunderous rise in gold.
First and foremost is the expectation that the Federal Reserve will lower rates on the Dollar during the next FOMC meeting, scheduled a mere two weeks from today. In the eyes of many, the current economic climate in the US more than justifies a 25-bps cut, which raises the question: is a bigger cut in play? This week will provide a number of data points on the US labour market, not least the latest non-farm payroll report on Friday. If the numbers are bad, it is possible the Fed will be forced to lower rates more than expected to spark some life into the American economy.
More generally, a growing sense of uncertainty is beginning to pervade global markets. Foreign central banks are now holding more gold than US treasuries, something that has not happened since the 1990s. Nations around the world have been shoring up their gold reserves all year and are showing no signs of letting up. The problems are not limited to a lack of confidence in the Dollar, although that is certainly part of it. The bigger issue is the lack of confidence in fiat currencies in general.
Bond yields around the world are on the rise. Euro bond yields have recently climbed to multi-year highs, while yields on 30-year UK gilts are at their highest since 1998. Yields on 30-year US treasuries meanwhile are a hair’s breadth under 5%. High yields mean low prices, which means investors are selling. The reasons why remain unclear but there are two problems two consider. Firstly, the sell-off points to a lack of confidence in government debt. Secondly, if such high yields are available to investors, it puts into question the current high valuations in stocks. If investors can get a safe 5% from bonds, why bother with a volatile stock market?
It is worth asking how crypto fits into the picture. Bitcoin enjoyed fresh record highs in August but has recently come down to more modest levels. A rate cut on the Dollar will certainly make crypto more appealing, but the bigger question is whether or not the world of digital currencies will ever act as a safe haven in the same way that precious metals do. It is interesting that Bitcoin rose in tandem with gold and silver yesterday, although the correlation is by no means established.
Introduction
We all love a bit of gold trading, don’t we? Super shiny, coveted, and somehow still more reliable than your local internet connection! Whether you’re a newbie trader staring hopefully at your candlestick charts or a seasoned institutional trader with a sixth sense for next big market move, gold has its own unique appeal
It has been treasured for millennia—from ancient bronze-aged kings to your grandma’s vintage wedding ring—and still today, it glitters like a bright star in the night sky on the Forex markets.
But why bother trading gold, you might ask yourself? Well, aside from the obvious “it makes you a lot of money,” gold has a unique charm: it tends to hold value when the economy goes south, when interest rates do the tango, or when geopolitical events make headlines. In short, it’s the financial equivalent of a pacifier to a screaming baby!
In this article, we’ll take an informative, slightly quirky journey through gold’s trading history, examine how global events—like the recent wars in Ukraine and Gaza—shake-up the markets, and look at what factors that could drive the price of gold in the next 12 months. Along the way, we’ll weigh up the pros and cons of trading gold and look at the current market price. So, grab a cup of your best coffee, and let’s talk about the treasured shiny stuff.
The History of the Gold Price
Humans have been obsessed with gold for thousands of years—and its price history reads like a dramatic Hollywood movie. Back in 1971, when the U.S. decided to ditch the gold standard, gold prices began their crazy rollercoaster ride. In the 1980s, gold flirted with highs around $850 per troy ounce, giving early traders a reason to celebrate (or cry, depending on which direction they were trading).
Fast forward to the 2000s: the financial crisis of 2008 sent gold skyrocketing. Investors, fearing the collapse of central banks, flocked to the “safe haven” metal, and by 2011, gold hit an all-time high of around $1,900 per ounce. Some traders were swigging the Bollinger; others were quietly kicking themselves for selling too soon.
Of course, markets aren’t just about numbers, they’re about people. The COVID-19 pandemic, for example, saw gold prices climb again, hovering around $2,000 per ounce at times. Uncertainty drives demand, and gold loves uncertainty like a Dog loves a walk.
Looking back, the main lesson for trading gold is clear: gold has survived wars, crises, and even political shocks for the global economies. For traders, it’s both a safety net and a wild ride, sometimes soothing, sometimes thrilling, but always exciting.
Geopolitical Events and Gold (Ukraine & Gaza)
Gold is the world’s unofficial “financial panic button.” When global tensions flare, investors rush to it like it’s the last lifeboat on the Titanic. Two recent examples— the war in Ukraine and the conflict in Gaza have both shown exactly how geopolitical events can really shake-up gold prices.
The Ukraine war, starting in 2022, it triggered a rush toward gold as investors sought safety amid economic uncertainty and the threat of sanctions. The metal prices spiked, reflecting fear, uncertainty, and the classic “better be safe than sorry” mentality. Traders watching gold charts go up probably felt like they were on a runaway train with chance of it stopping.
Meanwhile, tensions in Gaza also sent ripples through the markets, though on a somewhat smaller scale. Even localized conflicts can create global uncertainty, and gold tends to benefit from these jitters. Essentially, gold doesn’t care about borders or people; it only cares about fear, uncertainty, mixed in with a dash of global chaos.
For traders, these events underscore a simple rule: geopolitical crises can move gold more than your average economic news release. And while you don’t want to hope for war just to make profit (“no, we seriously, don’t want this”), staying aware of global events is key to making informed trading decisions when trading gold.
Factors Driving the Gold Price
Gold doesn’t just move on a whim—it dances to a mix of economic, political, and even slightly dramatic influences. What are the main drivers?
In short, gold reacts to a mix of economic indicators, global uncertainty, and the age-old push-pull of supply and demand. Understanding these factors gives traders a map through the glittering—but sometimes unpredictable—gold market.
Advantages and Disadvantages of Trading Gold
Trading gold isn’t all rainbows and butterflies—it has its ups and downs. Here’s the lowdown for newbie and intermediate traders:
Advantages:
Disadvantages:
In short, trading gold offers excitement and security in equal measures but, it’s not a guaranteed winning ticket. You need to approach it with a robust strategy, a bit of humor, and maybe a box of tissues on hand, just in case.
What to look out for in the year ahead
There are a number of factors that are likely to impact the price of gold over the course of the following year:
While certain assumptions can be made, it's important to note that gold prices can be volatile and unpredictable. Traders should stay informed about global economic and political developments that could impact the market.
Conclusion
Gold trading is a dazzling mix of history, economics, and a little bit of human psychology. From ancient civilizations hoarding the shiny stuff to modern traders navigating complex Forex charts, gold has maintained its allure—and of course, its value.
Geopolitical conflicts, central bank purchases, and even oil price shocks all add twists to the story, making gold a dynamic but sometimes unpredictable market.
With new exciting markets emerging such as the rise in digital currencies, Bitcoin and Ethereum for example, well, gold still has a top seat at the table and remain so for a very long time.
For traders, gold offers both security and excitement: a way to diversify portfolios, hedge against uncertainty, and maybe even enjoy a little thrill when the charts spike, or dip. Just remember, it can be a very volatile market and if you get it right, you will be on top of the world; get it wrong and, like most traders, you mark it down as a lesson well paid for!
In the end, gold remains the glittering asset in an ever-changing world. It may not pay you any dividends, but it sure knows how to make an entrance. So fellow trader, keep your wits about you, keep your eye peeled on global events, and let gold add a sparkle to your trading experience.
Disclaimer: The analysis provided is for informational and illustrative purposes only and should not be considered financial advice. The ideas shared are based on the guest author’s independent analysis and do not constitute investment recommendations or financial advice from Radex Markets.
Radex Markets cannot guarantee, and assumes no legal liability or responsibility for, the relevance, accuracy, currency or completeness of the information. All decisions to trade in financial markets involve risk, and it is the client's responsibility to assess their financial situation, level of experience, and risk tolerance before trading.
September has arrived. Only a few weeks of summer remain and the fourth quarter is fast approaching. The next Fed decision, scheduled for the 17th, is now widely expected to deliver a rate cut and certain assets are beginning to reprice accordingly. Gold rose by $30 last Friday to $3,447 per ounce following the publication of the latest PCE price index and continued to push higher this morning, reaching $3,486 earlier in the day. Impressive, but nothing compared to the price action currently unfolding in the silver markets. After trying and failing to breach $40 an ounce last Friday, silver shot straight to $40.50 after markets opened this morning in Asia and is now re-entering territory not explored since 2011.
The release of the July PCE price report also prompted a selloff in US stocks last Friday, pushing the major indices to modest losses. The report fell in line with predictions and showed that headline inflation remained at 2.6% in July, while core inflation nudged higher to 2.9% from 2.8% in June. For all the commotion in stocks and precious metals, the Dollar has stayed relatively unfazed, keeping the DXY around 98.
North American markets are closed today due to Labour Day, but the economic calendar has more than enough to offer this week to make up for it. Manufacturing PMIs dominate proceedings for the next couple of days before Services PMIs take over later in the week. Besides inflation, the Fed also has unemployment to worry about and this week will present a comprehensive picture of the US labour market. The JOLT survey is set to be released late on Wednesday, followed by the ADP employment change on Thursday. The big event of the week however will be NFPs on Friday. Last month’s report caused quite the stir, revealing poor jobs figures in July but more worryingly, publishing heavy revisions for previous months. Predictions for August are much more tepid, with only 78k new jobs expected and unemployment levels rising to 4.3%. Until then, all eyes on precious metals.
Welcome to our comprehensive guide on Forex Fundamental Analysis. In this article, we'll explore how understanding economic factors can significantly improve your trading decisions. From basic concepts to practical application strategies, helping both beginners and intermediate traders leverage fundamental analysis for better forex trading outcomes.
Fundamental analysis in forex is a method of evaluating currencies by examining the economic, social, and political forces that affect a country's currency value. Unlike technical analysis which focuses on price charts, fundamental analysis looks at the underlying factors that drive currency movements.
Advantages of fundamental analysis:
Disadvantages of fundamental analysis:
Read more: How to select the best analysis method for forex trading success
Understanding the driving forces behind currency movements is essential for forex trading. Below, we explore the 9 key factors that influence currency values in fundamental analysis. Understanding these fundamental elements helps you make decisions based on economic realities rather than just chart patterns.
GDP measures the total value of goods and services produced within a country. As the broadest economic indicator, strong GDP growth typically strengthens a currency as it signals economic health and potential interest rate increases.
CPI tracks inflation by measuring price changes in consumer goods and services. Higher inflation often leads central banks to raise interest rates, which can strengthen a currency in the short term.
This indicator measures consumer spending, a significant component of economic activity. Strong retail sales figures generally support currency appreciation as they signal economic strength.
Central bank decisions on interest rates directly impact currency values. Higher rates typically attract foreign capital, increasing demand for the currency and raising its value relative to others.
Employment reports like Non-Farm Payrolls (US) provide insight into economic health. Strong employment figures generally strengthen a currency as they indicate economic growth and potential wage inflation.
The difference between a country's exports and imports affects currency demand. A trade surplus (more exports than imports) typically strengthens a currency as it increases demand for that currency in international transactions.
The interest rate set by a country's central bank directly impacts its currency value. Higher rates generally attract foreign investment, strengthening the currency.
This survey of manufacturing activity serves as a leading indicator of economic health. Readings above 50 indicate expansion and may strengthen a currency, while readings below 50 signal contraction.
PPI measures changes in prices received by domestic producers. It often precedes changes in consumer prices and can signal future inflation trends, influencing central bank policy decisions.
Beyond just setting rates, central banks influence currencies through quantitative easing/tightening, forward guidance, and other monetary tools. Understanding a central bank's policy stance is crucial for fundamental analysis.
Political stability, elections, conflicts, and international relations can significantly impact currency values. Markets typically favour politically stable countries with predictable policies.
Government spending, taxation, and debt levels influence economic growth and inflation expectations. High debt levels may weaken a currency over time if perceived as unsustainable.
Events like Brexit, trade wars, or major policy shifts can create significant currency volatility. Traders must stay informed about global developments that might affect currency pairs.
For commodity-exporting countries (like AUD, CAD, NZD), changes in commodity prices directly impact their currencies. Rising commodity prices typically strengthen these "commodity currencies."
Investor risk perception affects "safe haven" currencies like USD, JPY, and CHF versus higher-yielding "risk" currencies. During uncertainty, safe havens typically strengthen as investors seek safety.
International investment and trade flows create demand for currencies. Countries with strong foreign investment inflows or export sectors often see currency appreciation.
Natural events and seasonal patterns can impact economies and currencies. Agricultural cycles, tourism seasons, and extreme weather events may create predictable currency movements in affected countries.
Indicator |
Expectations |
Effect on currency |
|---|---|---|
| GDP | Higher than forecast | Strengthens |
| Inflation (CPI) | Higher than target | Initially strengthens (may weaken long-term) |
| Interest Rate | Increase | Strengthens |
| Employment | Better than expected | Strengthens |
| Trade Balance | Surplus increase | Strengthens |
Fundamental analysis provides the "why" behind currency movements. While technical analysis shows what's happening on price charts, fundamentals explain the underlying reasons. The most successful traders combine both approaches.
For example, if the US Federal Reserve raises interest rates while the European Central Bank keeps rates steady, the USD typically strengthens against the EUR. Technical analysis might then help identify optimal entry and exit points within this broader fundamental trend.
Market reactions to fundamental news often follow these patterns:
Using fundamental analysis effectively requires a systematic approach. Knowing economic indicators and applying this knowledge to actual trading are crucial. The steps below will help you incorporate fundamental analysis into your trading strategy.
Research the economic structure of countries whose currencies you trade. Is it commodity-based like Australia? Manufacturing-focused like Germany? Service-oriented like the UK? This context helps interpret economic data appropriately.
Use the economic calendar to track upcoming announcements. Focus on high-impact events like central bank decisions, GDP releases, and employment reports. Compare actual results with market expectations to anticipate potential reactions.
Read more: Economic calendar
Currencies trade in pairs, so relative economic performance matters more than absolute performance. Compare growth rates, interest rate differentials, and inflation levels between currency pairs to identify potential opportunities.
Forward-looking indicators and central bank communications often provide clues about future economic conditions. Traders who correctly anticipate economic shifts can position themselves ahead of market movements.
Use fundamental analysis to determine the likely direction of a currency, then apply technical analysis to identify optimal entry/exit points, support/resistance levels, and potential reversal signals.
Fundamental events can create significant volatility. Use appropriate position sizing, set stop-losses, and consider reducing exposure before major economic announcements to protect your capital.
Develop systematic rules for trading fundamental events. For example, you might focus on trading only specific economic releases where you've identified consistent patterns, or develop strategies around central bank policy divergence.
Fundamental analysis provides insight into the underlying factors driving currency values. It helps traders understand why prices move, identify long-term trends, and anticipate market reactions to economic events. While technical analysis shows what's happening on the charts, fundamental analysis explains why it's happening.
While no single indicator is universally "best," interest rate decisions and expectations are among the most influential fundamental factors. Central bank policy announcements, inflation data, and employment reports also consistently impact currency markets. The most effective approach is to monitor a basket of indicators relevant to the specific currency pairs you trade.
Fundamental analysis examines economic, political, and social factors affecting currency values, focusing on the "why" behind price movements. Technical analysis studies price patterns, chart formations, and indicators to identify potential entry and exit points, concentrating on the "when" of trading. Most successful traders use both approaches complementarily.
Yes, understanding basic fundamental concepts is essential even for beginners. While you don't need to become an economist, understanding how major economic releases impact currencies and recognising when important news is scheduled helps avoid unexpected volatility and explains market movements. Beginners can start with major indicators like interest rates, GDP, and employment data.
Absolutely. Understanding the fundamental landscape helps traders anticipate potential market volatility, adjust position sizes accordingly, and avoid trading during high-risk events if desired. Being aware of upcoming economic releases and their potential impact is a crucial component of effective risk management in forex trading.
Read more: Effective risk management in FOREX
If you are a soldier going into battle, you would be best served by making sure you never forget your gun makes total sense, right? If you are new to trading, or even a seasoned “old sweat” at a top investment bank, then if you’re serious about forex trading, the “economic calendar” is your secret weapon. Ignore it at your peril.
You might be forgiven for thinking, “It’s just a list of numbers and dates—how exciting can that be?” Well, let me tell you, ignoring it is like jumping out of an airplane without a parachute; it won’t end well. Every number, every announcement, every “expected” inflation rate or unemployment figure can send currencies skyward or plummeting faster than you can say “Stop-loss!”
The economic calendar isn’t just about dates; it is a forecast of market mood swings. It tells you when traders are likely to panic, rejoice, or scratch their heads in total confusion. Missing a big news announcement isn’t just unlucky; it’s like dropping your wallet in a crowded street and hoping someone hands it back to you.
By the end of this article, you’ll understand why the economic calendar deserves a top spot on your desktop, your tablet, or even marked as a reminder on a post-it note stuck to your screen. You’ll also know how to read it like a professional trader.
Where to Find the Best Economic Calendar
Several reputable websites provide comprehensive economic calendars. Radex Markets, Investing.com, and FX Street are excellent starting points. Most forex brokers also provide one for convenience.
A key tip: cross-check your calendar across multiple sources. Sometimes, release times differ slightly between sites, and small discrepancies can matter when trading volatile currencies. Bookmark your chosen calendar and set up alerts like giving yourself a personal trading assistant.
The Role of Economic News in Forex Trading
The forex market is a dynamic, global environment where information constantly influences the value of currencies. Economic news releases—such as GDP reports, inflation data, and central bank interest rate announcements—play a crucial role in shaping market sentiment.
Traders closely monitor these releases because they can have a significant impact on currency prices. Market expectations are often priced in ahead of time and marked up as consensus figures. This means the actual market reaction depends not only on the numbers but also on how they compare them to forecasts. A slight deviation can trigger rapid price swings, turning calm markets into a rollercoaster ride.
For example, a recent surprise inflation report in the U.S. showed higher-than-expected CPI figures. The immediate reaction was a sharp rise in the USD against the euro and yen, illustrating just how sensitive forex markets can be too unexpected news.
Understanding the timing and potential impact of economic news is essential. It helps make informed decisions, manage risk effectively, and avoid costly surprises.
Major Economic Indicators That Move the Markets
If economic news is the pulse of the forex market, economic indicators are its vital signs. They provide a clear picture of the global economy and signal which way currencies might move.
Key indicators include:
Timing is also critical. Major releases in Tokyo, London, or New York sessions can affect liquidity and volatility differently. Knowing which market is active during a release helps traders plan entries and exist more strategically.
When the Unexpected Hits: Tariffs and Talking Heads
Even with a well-maintained economic calendar, the market reminds us of who’s really in charge: unpredictability. Tariffs, sudden policy announcements, or off-the-cuff remarks from influential figures can send currencies into freefall or a sudden rally, often without warning.
Take tariffs, for example. Beyond the well-known Trump-era trade disputes, unexpected tariff threats or resolutions like those affecting oil or technology imports can move commodity-linked currencies instantly. Unaware traders who aren’t paying attention may find themselves on the wrong side of massive moves. You definitely don’t want that!
Then there’s the “talking heads” phenomenon—not the rock band, but influential figures whose comments can shift markets. Remarks about interest rates, trade, or economic growth can trigger rapid buying or selling. Historical examples include sudden Tariff updates, Fed press conferences, and statements by prominent company CEOs.
The takeaway: the economic calendar can’t predict these surprises but staying informed about ongoing political and economic developments helps anticipate potential shocks. Combine calendar alerts with news monitoring and robust risk management tools like stop-losses and position sizing to reduce exposure.
How to Use the Calendar Like a True Pro
When you open your economic calendar, it may look like a narrative from the Klingon empire. Don’t worry, using it effectively is easier than it seems once you know the basics:
A practical tip: check your calendar first thing each morning. Note the high-impact events, align them with active trading sessions, and plan your strategy. Doing so turns what might seem like an overwhelming list of numbers into a clear roadmap for your trading decisions.
Conclusion – Smarter Trading, Smarter You
At the end of the day, the economic calendar isn’t just another tool—it’s your roadmap through the chaotic world of forex trading. It helps you anticipate market movements, understand economic trends, and prepare for both scheduled events and unexpected surprises.
From GDP reports to NFP data, from interest rate announcements to sudden remarks by influential figures, staying aware of global economic developments gives you a clear advantage. Traders who ignore the calendar often end up reacting instead of acting—and when you are forex trading, reaction can be costly.
Make checking the economic calendar a daily habit. Combine it with smart risk management, a keen eye on breaking news, and careful timing. Treat the economic calendar not as a chore, but as your vital personal trading assistant. With it on your side, you’ll navigate the forex markets more confidently, avoid unnecessary surprises, and trade smarter. Everybody likes a smart trader, nobody like getting caught with their pants down!
US stocks recouped much of Monday’s losses yesterday and the S&P 500 index is now perched just under record highs. With little going on so far this week, investors turned to the latest drama between Trump and the Federal Reserve. On Monday, the president published a letter to governor Lisa Cook, announcing the immediate removal of the board member from her post. The letter has sparked a debate relating to whether the president had the authority to do so, once again bringing back the question of the Fed’s supposed independence. The move to remove Cook comes in light of an investigation by the Department of Justice, who called on Jerome Powell to dismiss the governor last week following allegations of mortgage fraud involving several properties. The situation has not resulted in any change in expectations to the next interest rate cut in September.
Nvidia will publish its second quarter earnings later today after the closing bell. Despite the ongoing reshuffling of worldwide trade, shares are currently just under record highs at $181 while the company’s market cap now sits at a staggering $4.4 billion. The Trump administration initially banned Nvidia from selling chips to China before softening its tone and implementing a 15% fee to be paid to the government instead. Just how much this will impact the chipmaker’s bottom line remains to be seen, but according to the Q1 earnings call the measure is expected to slash $8 billion off the bottom line.
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