Gold Analysis 12.02.2021

Futures contracts for gold prices fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the third session from its highest since the second of February, while it is still in the process of its first weekly gains in three weeks amid the positive stability of the US dollar index according to the inverse relationship between them on the cusp of Economic developments and data expected on Friday by the US economy, the largest in the world.

At exactly 05:05 a.m. GMT, gold futures contracts for next April delivery decreased 0.19% to trade at $ 1,821.90 an ounce, compared with the opening at $ 1,825.40 per ounce, knowing that the contracts started the session on a downward price gap after yesterday's trading was concluded At $ 1,826.80 per ounce, with the US dollar index rising 0.10% to 90.50 compared to the opening at 90.41.

Investors are awaiting the American economy to reveal consumer confidence data with the release of the preliminary reading of the University of Michigan Consumer Confidence Index, which may show an expansion to 80.8 compared to 79.0 last January, also in conjunction with the disclosure of consumer expectations for inflation. For the next one year, and for the next five years.

Down to the Fed disclosure of its semi-annual monetary policy report, which includes a summary of discussions about the conduct of monetary policy and economic developments as well as future prospects, which is presented along with a testimony from the Fed governor to the Senate Banking, Housing, and Cultural Affairs Committee and to the Financial Services Committee in Parliament.

Otherwise, last Wednesday, Fed Governor Jerome Powell expressed that the Federal Open Market Committee will maintain the current pace of the bond-buying program, which is estimated at $ 120 billion per month at least, until further expanded progress is made towards achieving maximum employment and achieving price stability. He explained that the correction of the effects associated with Corona's need would boost the unemployment rate in January to approach 10%.

Powell noted at the time that based on a bleak picture of jobs, monetary policy will need to remain patiently adaptive, explaining that interest will remain low for a period of time, and he states that unemployment rates fell in January to 6.3%, but Powell believes that the employment picture " Too far "from where it should be, indicating that the actual unemployment rate may be closer to 10% and that the Fed needs to focus on its" broad and inclusive "employment target.

"Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, maximizing and maintaining employment opportunities will require more than supportive monetary policy and will require a community-level commitment to contributions from the government and the private sector," Powell said, adding the expansion. It will help with vaccinations as well as financial programs such as the Salary Protection Program that provides loans to companies that keep workers.

Technical analysis

The price of gold ended yesterday's trading below the 1830.00 level, to activate the bearish trend scenario in the intraday and short term, on its way to achieving negative targets that start at 1800.00 and extend to 1765.00.

Thus, the bearish bias will be likely for the upcoming period, supported by moving below the SMA 50, noting that breaching 1830.00 then 1838.10 will stop the expected decline and lead the price to turn higher.

The expected trading range for today is between 1800.00 support and 1835.00 resistance

The expected general trend for today: Bearish