Gold Analysis 09.08.2019

Gold futures fluctuated in a narrow, bullish range during the Asian session to stabilize near the highest in more than six years amid the decline of the US dollar index for the fifth session in seven sessions from the highest since May 15, 2017 according to the inverse relationship WASHINGTON (AP) - The US economy, the world's largest economy, is in the shadow of worries about trade tensions.

Gold futures for December 15 delivery rose 0.17% to currently trade at $ 1,518.50 an ounce compared to the opening at $ 1,515.90 an ounce, knowing that the contracts started the session on a bullish gap after the close of trading Yesterday at $ 1,509.50 an ounce, with the US dollar index down 0.02% to 97.55 compared to the opening at 97.57.

Japan's second-largest economy followed the release of growth data which showed the world's third-largest economy grew by 0.4% in the second quarter, beating expectations for 0.1% growth and 0.6% growth in the first quarter. Reserve Bank of Australia Philip Lowe before the Standing Economic Committee of the House of Representatives in Canberra before witnessing the disclosure of the minutes of the Australian central meeting.

The Reserve Bank of Australia kept interest rates at an all-time low of 1.00% on Tuesday after cutting them by 25 basis points in the previous two meetings, before last Wednesday's Reserve Bank of New Zealand cut interest rates by 50 basis points to an all-time low. At 1.00%, contrary to expectations for a 25bp cut.

This came before the release of inflation data for the largest economies of Asia and the second largest economy in the world, which came in contrast with the annual reading of the CPI showed that the pace of growth accelerated to 2.8% compared to the previous annual reading for the month of June and expectations of 2.7%, while the reading showed The annual PPI contraction shrank 0.3% compared to the previous annual reading and expectations of steadyness at zero levels.

In another context, we followed yesterday's Washington decision to ban US companies from signing contracts with Huawei China as well as a number of other Chinese companies starting from 13 of this month, noting that exemptions may be granted in certain circumstances for up to two years by a president. A federal agency or in other cases by the director of national intelligence services, in return, Beijing offered that decision considering it unfair.

Earlier this week, the US administration criticized China after the yuan fell below 7 yuan per dollar for the first time in more than a decade, describing it as manipulating the exchange rate to take advantage of competitive export advantages over others. In return, the Chinese central bank rejected accusations by the US Treasury Department of manipulating the exchange rate of the yuan and fighting a currency war within the trade war.

This follows the recent escalation of trade tensions between the United States and China following Chinese Commerce Ministry statements over the weekend that Chinese companies may stop buying US agricultural products in response to US President Donald Trump's decision last week to impose 10% tariffs on Chinese imports to his country worth 300 $ Billion by early next month.

The Chinese Ministry of Commerce reported earlier this week that it would not "exclude" tariffs on agricultural goods purchased after August 3, and China is one of the largest importers of US agricultural products. Jang also said last Monday that his country would not use currency exchange rates as a tool in the escalating trade dispute with the United States.

On the other hand, investors are awaiting the US economy to reveal the PPI reading, which is a preliminary indicator of inflationary pressures that may reflect the acceleration of growth to 0.2% vs. 0.1% in June, while the core reading of the same indicator may show growth slowed to 0.2%. Against 0.3%, while the annualized reading of the index itself and the core annualized reading of the index may show growth stability at 1.7% and 2.3% respectively.

President Donald Trump said yesterday that as president of the United States, some people think he is happy about the strength of his nation's currency, but this is not true, as it negatively affects the activities of American companies. It is the backbone of the largest economy in the world, especially its exports to foreign markets.

US President Trump on Wednesday hinted that the main problem lies not in China, but in the Federal Reserve, with accusing the Federal Reserve of stubbornly admitting its erroneous tendencies and hastening to raise interest rates on federal funds, while appealing to him to cut rates faster and faster. Stop all the tightening steps, and touched on the weakness of inflationary pressures and the widening of the yield curve gap.

Technical Analysis

The price of gold was able to breach the resistance of the bullish flag mentioned yesterday to activate the positive effect of this pattern, which supports our continuation of the bullish trend effectively during the coming period, and the way is open to achieve our next target at 1526.85.

Thereby, we are waiting for a further rise for today supported by SMA 50, provided that the price maintains its stability above 1484.40.

Expected trading range for today is between 1495.00 support and 1525.00 resistance

Expected trend for today: Bullish.