Gold Analysis 05-07-2021

Gold futures fluctuated in a narrow range tilted to the downside during the Asian session, to witness its rebound for the second session from its highest level since June 18, amid the positive stability of the US dollar index near its highest in three months, according to the inverse relationship between them, amid the scarcity of economic data today, Monday. by the American economy due to the Independence Day holiday in the United States of America.

At exactly 05:18 am GMT, gold futures contracts for August delivery fell 0.06% to trade at $1,786.40 an ounce, compared to the opening at $1,787.50 an ounce, knowing that the contracts started the session’s trading on an upward price gap after it concluded the week’s trading Last at $1,783.30 an ounce, with the US Dollar Index rising 0.12% to 92.35 compared to the opening at 92.23.

The markets are looking forward by next Wednesday to reveal the minutes of the Federal Open Market Committee meeting, which was held on June 15-16, during which the interest rate was fixed at its lowest ever, between zero and 0.25%, and the bond purchase program was maintained at more than $120 billion. In addition to revealing at the time the monetary policy makers' expectations of growth rates, inflation and unemployment, in addition to the future of interest rates for the next three years.

It is reported that Fed Governor Jerome Powell noted in his post-meeting press conference last month that the Fed was not really considering an interest rate hike at the moment and pledged to continue buying assets ($120 billion per month) until "another significant progress" is made on employment and inflation. It was seen as a lull in the markets' initial reaction to the Fed's revision of two rate hikes in 2023.

In another context, we followed last Thursday, the International Fund announced that the Federal Reserve (the US central bank) will likely begin to reduce the bond purchase program, which exceeds $ 120 billion per month, including $ 80 billion government bonds and $ 40 billion mortgage bonds, by half. The first of 2022 and that it may need to raise the federal funds rate later that year or early 2023.

Technical Analysis

Gold price achieved intraday gains in the past sessions, to cross the EMA50 50 and reach the outskirts of the 1800.00 level, and we notice that the price returns to the sideways path whose edges are represented by the mentioned resistance and 1770.00 support, which makes us likely to witness sideways trades until the price is able to surpass one of the mentioned levels.

We point out that breaching the mentioned resistance will lead the price to achieve additional gains reaching 1825.15 then 1860.00, while breaking the support will pressure the price to resume the bearish trend whose next target is at 1734.10.

The expected trading range for today is between the support 1765.00 and the resistance 1805.00

Expected general tendency for today: side