Gold Analysis 01.02.2019

Gold futures traded in a tight range slipping into the Asian session to see their rebound for the second high session since April 26 as the US dollar index rose for the second consecutive session from its lowest level since January 10 according to the relationship On the eve of developments and economic data expected Friday by the US economy, the largest economy in the world and after the end of the second round of trade talks between the United States and China in Washington.

Gold futures for April delivery fell 0.27% to currently trade at $ 1,323.30 per ounce, reversing their 10-month high against the opening at $ 1,326.00 per ounce, amid a rise in the US dollar index of 0.06. % To 95.61, showing a three-week retracement of its decline from the opening at 95.55.

The markets are currently looking for the US economy to reveal labor market data for the month of December, which may reflect the stability of unemployment rates at 3.9% for the second month in a row after the rise in December for the first time in four months from its lowest in nearly five decades, Amid expectations that the average hourly earnings reading would slow growth to 0.3% from 0.4% in December.

The markets are also looking at the Non-Farm Payrolls, which may reflect a slower pace of job creation to 165,000 jobs versus 312,000 jobs added in December, before we see the final reading of the PMI by Market on the US last month, which may reflect the stability of the widening at a value of 54.9 versus 53.8 in December.

And the index of the Industrial Supply Institute index, which may show the stability of the widening at 54.1, unchanged from December, while the reading of the same indicator, measured in prices may narrow the breadth to 54.4 compared to 54.9, in conjunction with the final reading of the index Wholesale stocks that may reflect slower growth to 0.5% vs. 0.8% last November,

In addition to a reading of the Construction Spending Index, which could rise 0.2% from 0.1% in November and the final reading of the University of Michigan Consumer Confidence Index, which may reflect a widening to 90.8 from January's reading, January at 90.7 versus 98.3 in December, as well as consumer expectations of inflationary pressures for a year and five years.

On the other hand, the second round of US-China trade negotiations, held in Washington, ended yesterday as "crucial" with the parties agreeing to continue the dialogue before the end of the truce between the two parties in March and their expansion in tariffs if they do not reach For an agreement or extension of the truce, which aims to avoid a global trade war between the world's biggest economists.

US President Trump noted that nothing final would be agreed between his country and China before meeting with his Chinese counterpart, Xi Jinping, and that until then meetings would be held between the trade representatives of both countries to agree on key points, With his Chinese counterpart to discuss the shape of future relations and agree on some fine points to conclude a comprehensive final trade agreement for everything.

On the other hand, the World Gold Council's statistics yesterday pointed to the global purchases of gold by the central banks last year 2018 to their highest level since 1967. Purchases rose to 651.5 mt, up 74% from 2017, Of countries to buy the yellow metal topped by China, the world's largest consumer of metals, then Poland and Russia in addition to Kazakhstan.

The global gold consumption ratio rose to 4,345.1 tons last year from 4,159.9 tons in 2017. Retail investment in bullion and gold coins rose 4% to 1,090.2 tons, supported by an increase in Iranian demand by 222% to 62 tons. Demand for jewelry Approximately 2,200 tons with offset increased consumption in both China, the United States and Russia demand drop from the Middle East and India.

In contrast, demand for financial institutions fell by 67% from the year 2017, when the global supply of gold rose 1% to 4,490.2 in 2018. Gold futures last month made their fourth consecutive monthly gain, showing the longest run Has seen monthly gains since late 2010, after ending its longest monthly loss march since October 1996.

Technical Analysis

Gold is testing the support floor above 1316.65 after it has been breached in advance, accompanied by Stochastic reaching oversold levels, while SMA 50 continues to support the price from below.

Therefore, these factors encourage us to continue the bullish trend for the coming period, which targets 1335.00 as a next stop, while stability is required above 1316.65.

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

Support and resistance:

Support: 1316.65-1310.17-1302.51

Resistance: 1321.65-1333.78-1349.12

The general trend for today is bullish