Gold analysis 20.06.2019

Gold futures rallied during the Asian session, their highest since September 5, 2013, as the US dollar index fell to its lowest level since June 12, according to the inverse relationship between them and the Bank of Japan meeting in Tokyo amid expectations of the Central Bank's approval. Japanese economy to further stimulus and on the eve of developments and economic data expected Thursday by the US economy, the largest economy in the world after the expiry of the meeting of the Federal Open Market Committee in Washington.

Gold futures for August delivery rose 1.44% to currently trade at $ 1,384.10 per ounce compared to the opening at $ 1.364.50 per ounce. The contracts closed yesterday's trading at $ 1.348.80 an ounce before trading Today saw a bullish price gap of around $ 1,397.70 an ounce, with the US dollar falling 0.30% to 96.89, its lowest level in a week compared to the opening at 97.18.

Investors are now looking closely at the outcome of the BOJ meeting, hours after the FOMC meeting on 18-19 June, at which interest rates were kept between 2.25% and 2.50%, and revealing the Commission's expectations Federalism over growth rates, inflation and unemployment as well as future interest rates for the next three years.

"We will act as necessary" to maintain the economy, which reflects the possibility of a possible cut in federal interest rates later on. In particular, the Federal Reserve's interest rate projections showed that eight Members see a reduction this year, knowing that the average forecast did not reflect any reduction this year, but next year 2020.

Fed Governor Jerome Powell said at a news conference after the meeting in Washington that some monetary policy makers in the Fed believe that the issue of soft monetary policy has been strengthened, stressing that the Committee will continue to monitor developments and economic data closely during the coming period to determine the future Monetary policy depending on those developments and data.

Otherwise, we have followed earlier this week European Central Bank Governor Mario Draghi at the ECB forum on central banks in Sintra, Portugal, that the ECB does not target specific levels of the euro exchange rate, noting that the continued ambiguity strengthens risks and the absence The improvement requires action, pointing out that inflationary pressures are still weak and they are moving at a slow pace amidst the pace of growth.

European Central Bank President Draghi also noted at the forum last Tuesday that the ECB will take more monetary stimulus steps unless growth and inflationary pressures in the euro zone improve, following the fact that interest rate cuts will remain one of the tools at the ECB's insistence that monetary policy makers The ECB is ready to expand the stimulus.

Draghi's remarks, reflecting a general trend at global central banks to adopt stimulus to support growth and inflation rates that remain fragile, coincided with growing risk over the UK's exit from the EU and global trade tensions due to recent trade protectionism by the US administration, Minutes of the Reserve Bank of Australia meeting on the possibility of another rate cut later.

Investors are currently looking for the US economy to release a current account reading, which could reflect a contraction of the deficit to $ 125 billion versus $ 134 billion in the fourth quarter, in conjunction with the reading of the index of claims for the week ending on 15 of this month which may reflect a decline By 2 thousand requests to 220 thousand applications compared to 222 thousand applications in the previous weekly reading.

On the 8th of this month, the index of continuing jobless claims may show a decline of 15K to 1,680K versus 1,695K, as the Philadelphia Manufacturing Index may show a contraction of 10.6 vs. 16.6. May, and before we see the leading indices reading, which may show a contraction of the widening to 0.1% vs. 0.2% in April.

Technical Analysis

Gold is trading strongly today after confirming the breach of 1346.70 yesterday to surpass our second target at 1365.25 and approaching the $ 1400.00 barrier, so that the bullish trend remains likely over the short term and intraday basis within the ascending channel appearing in the image.

Therefore, we are waiting for further upside during the day supported by SMA 50, with the next target reaching 1433.60, taking into consideration that stability above 1346.70 is important for the continuation of the suggested bullishness.

The trading range for today is among the key support at 1365.00 and resistance at 1400.00.

The general trend for today is bullish.