Gold Analysis 31.01.2019

Gold futures fluctuated in a narrowly bearish range during the Asian session to see their rebound to its second-highest session since May 14, shedding the US dollar's lowest since January 11 according to their inverse relationship following developments and data. On Thursday as China's largest consumer of metals and on the eve of economic developments and economic data expected Thursday by the US economy in conjunction with the trade talks between Washington and Beijing.

At 03:55 am GMT, gold futures for April delivery fell 0.08% to currently trade at $ 1,323.90 per ounce from the opening at $ 1,325.40 per ounce, while the US dollar index fell 0.15% to 95.26, Three weeks compared to the opening at 95.35.

We have followed the Chinese economy, the world's second largest industrial nation, by reading the Industrial and Service Purchasing Managers Index by the China Logistics and Purchasing Federation (CFLP), which reported contraction of the industrial sector to 49.5 versus 49.4 in the previous reading for December, At 49.3, and the service sector expanded to 54.7 versus 53.8, beating expectations of 53.9.

On the other hand, the markets are currently looking to the US economy for a reading of the Labor Cost Index for the fourth quarter, which may reflect the stability of growth to 0.8%, unchanged from the third quarter, in conjunction with the publication of the index of requests for aid for the week of 26 January, Which may reflect a rise of 16 thousand applications to 215 thousand requests in the previous weekly reading,

Ahead of the Chicago PMI reading, which could reflect a contraction of 61.5 vs. 65.4 last December, to reveal housing market data with a new home sales reading that could reflect a rise to around 569,000 homes Compared with 544,000 in November.

This comes just hours after the FOMC meeting on 29-30 January, which left the committee on federal funds rates at between 2.25% and 2.50% with a further reduction in bond repurchase by $ 50 Billion dollars a month before Federal Reserve Governor Jerome Powell said the panel would be patient about raising interest rates in the coming period.

Otherwise, the financial markets are now looking closely at the outcome of the trade talks between the world's top economists after Chinese Vice Premier Liu Hu arrived in the United States yesterday for a two-day visit and meeting with US Trade Representative Leftizer and Treasury Secretary Stephen Menuchin to discuss trade disputes Between the two countries, and is expected to meet later today with US President Donald Trump.

Technical Analysis

Gold managed to reach 1321.65, consolidating expectations of a continuation of the ascending trend within the ascending channel shown on the chart above and the way ahead towards our next target at 1333.78.

SMA 50 continues to support the pair from the bottom, waiting for further bullishness during the coming sessions, noting that a break of 1316.65 would put the price under immediate negative pressure that might target the 1286.70 zones before any new attempt to rise.

The trading range for today is among the key support at 1310.00 and resistance at 1335.00

Support and resistance:

Support: 1310.17-1302.51-1293.60

Resistance: 1321.65-1333.78-1345.00

The general trend for today is bullish