Gold Analysis 04.02.2019

Gold futures fell during the Asian session to rebound to its second-highest session since April 25 as the US dollar index rose for the third consecutive session from its lowest level since January 10 according to the inverse relationship between them on the eve of developments and data Economic outlook on Monday by the US economy, the world's largest economy.

Gold futures for April delivery fell 0.29% to currently trade at $ 1,318.20 an ounce, showing a 10-month high from the opening at $ 1,322.60 per ounce, amid a rally in the US dollar 0.05% to 95.66, showing a rebound from its lowest level in four weeks compared to the opening at 95.60.

he markets are currently looking for the US economy to release the factory demand index, which may rise 0.3% from 2.1% in October, To 4.0% from December's 3.9%.

In the same context, the average hourly earnings reading showed a slowdown in growth to 0.1% from 0.4% in December, worse than expectations of 0.3%, while the Nonfarm Employment Change Index showed that job creation accelerated to 304K Adding an added 222,000 jobs in December, beyond expectations for 165,000 jobs.

Federal Reserve monetary policy makers kept the federal funds rate at 2.25% to 2.50% at the Federal Open Market Committee meeting held on 29-30 of last month as they continued to cut back on bond purchases by $ 50 billion a month. Federal Reserve Governor Jerome Powell said at the time that the committee would be patient about raising interest rates.

On the other hand, the World Gold Council's statistics last week pointed to the global purchases of gold by the global central banks in 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 jewelery 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

The price of gold opens today with a bearish move to break the 1316.65 level and settle below it, placing the price under negative pressure expected over the intraday basis, targeting the levels of 1295.00 and then 1286.70 mainly.

Therefore, the bearish bias will be likely in the coming sessions unless the price is able to breach the 1316.65 level and stabilize above it again.

The moving averages support the downside as we note that the mediums -20 above the price near the resistance level 1316.65 will increase the negative pressure on the price for further decline.

Stochastic is also trading negatively in the overbought area, increasing the downside.

The trading range for today is among the support at 1295.00 and resistance at 1320.00

Support and resistance:

Support: 1310.17-1302.51-1293.60

Resistance: 1316.65-1321.65-1333.78

The general trend for today is bearish