Gold Analysis 14.12.2018

Gold futures fell during the US session amid the rise of the dollar index for the third session in four sessions of the lowest since 22 November last according to the inverse relationship between them after the developments and economic data that followed Thursday on the US economy, the world's largest economy and on the threshold Revealed the treasury budget for last month.

We have followed the US economy to reveal the reading of the index of requests for aid for the week ending on the eighth of this month, which showed a decline of 27 thousand applications to 206 thousand requests in the previous weekly reading, compared to expectations of 226 thousand applications, while the reading of the index of continuing requests for the week Which ended earlier this month, up 25K to 1,661K, worse than expected at 1,649K.

The import price index, which showed a drop of 1.6% from 0.5% in October, was worse than the 1.0% expected. The markets are currently looking to unveil the Treasury budget reading, which may reflect a widening deficit to 193.5 Billion compared to $ 100.5 billion in October.

In another context, on Tuesday we followed US President Donald Trump's criticism of the Federal Reserve's policy tightening policy under the leadership of Federal Reserve Governor Jerome Powell and raising interest rates on federal funds in Trump's interview with Reuters. "It would be foolish to do that, but what should I do?"

The US president said he wanted the Federal Reserve to cut interest rates to support the US economy externally, especially in the midst of a trade war with China and other countries, while praising the fact that the Federal Reserve Secretary Powell is a good man despite his disagreement with him, saying Powell believes He does what he believes to be true, but I think he is too hasty about raising interest rates in America.

On the other hand, former Federal Reserve Governor Janet Yellen warned yesterday of the possibility of a new financial crisis due to gaps in the banking system, especially the decline of powers of regulatory authorities in the face of any possible crises under the direction of US President Trump to reduce the restrictions, There is no doubt that there are still gaps in the American banking system.

This comes just a week before the Federal Open Market Committee meeting on December 18-19 in Washington, where Federal Reserve policy makers are expected to raise federal funds rates by 25 basis points for the fourth time. This year to between 2.25% and 2.50% and move forward in reducing the repurchase of government bonds and mortgage bonds.

The Federal Committee is expected to unveil inflation and unemployment as well as the future of short-term benchmark interest rates for the next three years as investors look for hints about the future tightening of monetary policy and the pace of raising federal funds in criticism. US President of the Federal Policy and the momentum of the strength of economic data recently.

Technical Analysis

The price of gold shows negative trading near the pivotal support 1238.30. We note that SMA 50 continues to provide positive support for the price, so the bullish trend will remain effective over the coming period, which requires stability above this level, while our next target is at 1262.51.

Support and resistance:

Support: 1238.8-1227.4-1221.9

Resistance: 1251.4-1257.00-1262.8

The trading range for today is among the support at 1235.00 and resistance at 1262.50

The general trend for today is bullish