Gold Analysis 02.01.2019

Gold futures fell during the Asian session, shrugging off the dollar's fourth session decline in five sessions from its highest since May 16 of 2017 according to the inverse relationship between them on the eve of developments and economic data expected Thursday by the US economy, the largest economy in the world the world.

Gold futures for June delivery fell 0.27% to currently trade at $ 1,274.80 per ounce compared to the opening at $ 1,278.50 per ounce, while the dollar index fell 0.02% to 97.60 compared to the opening at 97.63. .

US investors are looking for a preliminary reading of the single labor cost index, which reflects a slower growth to 0.9% versus 1.9% in the fourth quarter, while the preliminary reading of non-farm productivity may show growth accelerating to 2.4% vs. 2.0%, The reading of the index of requests for aid, which may show a decline by 10 thousand requests to 220 thousand applications during the last week last Saturday.

Leading to the release of the factory demand index, which may reflect a rise of 1.0% against 0.5% decline in February, before we see the release of the US Treasury Department's semi-annual report on international economic and exchange rates, (FOMC) held in late April and early May in Washington.

Fed monetary policy makers have agreed to keep interest rates between 2.25% and 2.50% for the third consecutive meeting as we move forward in reducing the reduction of bond buyback before freezing by September, Fed Chairman Jerome Powell said the committee would be patient about raising interest rates in the coming period.

In a press conference following the expiration of the Federal Committee meeting, Powell said that the US economy and the US labor market remain strong, noting that core inflation in the US remains below the Federal Reserve target of 2 percent, adding that there is no Now need to raise or lower the federal funds rate, while emphasizing the independence of monetary policy.

Otherwise, we also followed on Wednesday US Treasury Secretary Stephen Menochin said he and US Trade Representative Robert Laitheiser had concluded fruitful and constructive talks with Chinese Vice Premier Liu Hu, who will lead a Chinese delegation that will visit Washington on October 8 to conduct More discussions and business updates, coinciding with growing expectations that the two parties could reach a trade deal soon.

Experts at Standard Chartered Bank have recently forecast that gold prices will rise again to last year's high of $ 1,365 an ounce, as prices close to the peak of the sell-off and its decline to the lowest level this year recently, amid the statement that one of the main assumptions that have The recovery is supported by the Federal Reserve's policy of patience and its suspension of plans to tighten monetary policy and raise interest rates.

According to experts, the default is based on the Federal Reserve's readiness for a possible recession by 2021, which could support the performance of safe haven gold, as they point to a surge in global central bank purchases and recent high demand for gold by China and India, By the price cycle, accordingly they expect prices to rise to $ 1,365 an ounce and that the average price next year is $ 1,375 an ounce.

Technical Analysis

The price of gold traded negatively yesterday, and starts further today to break the 1275.30 level and settle below it, putting the pair under the corrective correction again to turn down and reach 1253.20 initially.

From here, the bearish trend will be likely in the coming sessions unless the levels of 1275.30 and 1282.00 are breached and stability above it, noting that exceeding the target will push the price towards 1231.10 as the next station.

The trading range for today is among the support at 1260.00 and resistance at 1285.00.

The general trend for today is bearish.