Gold Analysis 14.02.2019

Gold futures fluctuated in a narrowly bullish range during the Asian session as the US dollar index fell for a second session since Dec. 17 according to the inverse relationship between them following developments and economic data followed Thursday by China's largest consumer economy Of metals worldwide and on the brink of economic developments and data expected by the US economy, the world's largest economy, amid the launch of the third round of US-China trade talks in Beijing.

Gold futures for April delivery rose 0.14% to currently trade at $ 1,311.10 per ounce, compared to the opening at $ 1,309.60 per ounce, amid the decline of the US dollar index to 0.97% to 97.09 compared to the opening at 97.14.

We followed the Chinese economy's reading of the trade balance index, which showed the surplus shrank to 271 billion yuan, or 39.2 billion US dollars, compared to 395 billion yuan, or 57.1 billion dollars in December, exceeding expectations. Which indicated the surplus shrank to 241 billion yuan, or $ 33.9 billion, as imports fell below expectations and exports surged beyond expectations last month.

On the other hand, investors are currently looking for the US economy to reveal the reading of retail sales, which account for about half of consumer spending, which represents more than two thirds of the United States GDP, which may reflect a slowdown in growth to 0.1% compared to 0.2% in November last year, While the core reading of the retail sales index may show stability at zero versus 0.2% in November.

The markets are also looking for the PPI, which is a preliminary index of inflationary pressures, which could reflect a 0.1% expansion versus a 0.2% contraction in December, while the annual reading of the same index may show a slowdown of growth to 2.1% versus 2.5% in the previous annual reading for the month of December.

In the same context, the core reading of the PPI may show a 0.2% growth versus 0.1% contraction in December, while the core annualized reading of the same index may reflect a slowdown in growth to 2.5% versus 2.7% in December, From a reading of the index of applications for aid, which may reflect a decrease of 9 thousand applications to 225 thousand applications during the week of the ninth of this month.

In addition, the World Gold Council's statistics at the end of last month pointed to a rise in 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 to 375 Metric tons, with many countries buying the yellow metal topped by Russia by 274 metric tons, which surpassed China, the largest consumer of metals worldwide and inspire 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 stabilizing within the bearish intraday channel and below the SMA 50, reinforcing expectations for the expected bearish trend over intraday basis, as the price is approaching our first target at 1300.00, noting that exceeding this level will push the price towards 1286.70 directly.

Therefore, we will continue to bias the downside move for the day provided stability below 1316.65.

The trading range for today is among the support at 1286.00 and resistance at 1320.00

Support and resistance:

Support: 1305.52-1301.10-1293.45

Resistance = .309.50-1316.65-1321.70

The general trend for today is bearish