Gold Analysis 07.02.2019

Gold futures traded in a tight range slipping into the Asian session to see their fourth session retreat in five sessions from its highest since April 25 as the dollar index rebounded for the sixth consecutive session from its lowest since January 10 Past the reverse correlation between them after Fed Governor Jerome Powell spoke in Washington on the eve of developments and economic data expected Thursday by the US economy, the world's largest economy.

Gold futures for April delivery fell 0.23% to currently trade at $ 1,307.50 per ounce, its lowest since January 29 compared to the opening at $ 1,310.90 an ounce, amid a rise in the dollar index. American dollar dropped 0.06% to 96.44, its highest since 25 of last month compared to the opening at 96.39.

Federal Reserve Vice President and Federal Open Market Committee Chairman Randall Quarles spoke of the stress test for banks at the Board of Education in New York before we saw Governor of the Federal Reserve Jerome Powell speaking at the National Virtual Teacher's Hall meeting at which he noted Income inequality and slowness in productivity are the biggest challenges of the coming decade.

Powell said slow productivity and a widening wealth gap are the biggest challenges facing the United States over the next decade, adding that his major economic concerns fall outside the purview of the Federal Reserve, with emphasis on the adoption of more aggressive policies to address income inequality. In the middle and lower levels "grew much slower" than wages in the upper limbs.

The markets are currently looking for the US economy to read the Jobless Claims Index for the week ending February 2nd, which may reflect a 33K drop to 220K in the previous week's reading before we see the Federal Reserve Vice President and member of the Federal Market Commission Open Richard Clareda about neutral interest rates at the Czech National Bank conference in Prague.

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 metric tons, up 74% from 2017 to 375 tons Metric tonnes, with many countries buying gold, topped by Russia, at 274 metric tons, which surpassed China, the world's largest consumer of metals, and inspire both Poland and Kazakhstan.

Global gold consumption rose to 4,345.1 metric tons last year from 4,159.9 metric tons in 2017. Retail investment in bullion and gold coins rose 4 percent to 1,090.2 metric tons, supported by Iran's demand increase of 222 percent to 62 metric tons, Demand for jewelry has stabilized at around 2,200 metric tons with increased consumption compensation in both China, the United States and Russia for lower demand from the Middle East and India.

In contrast, the demand for financial institutions fell by 67% from the year 2017, when the world supply of gold increased 1% to a total of 4,490.2 metric tons in 2018. The gold futures contracts last month made the fourth monthly gain, respectively, illustrated Has seen its longest monthly gains since late 2010, after ending its longest monthly loss march since late 1996.

Technical Analysis

The price of gold is showing further bearishness to test the 1302.50 barriers now, bolstering expectations for a continuation of the decline over the coming sessions, targeting 1293.60 and then 1286.70, supported by the completion of a double top model showing its features.

From here, we are waiting for further downside today unless the price is pushed to breach the 1316.65 level and stability above it.

The trading range for today is among the support at 1286.00 and resistance at 1316.00

The general trend for today is bearish