Gold Analysis 15.08.2019

Gold futures fluctuated in a narrow uptrend range during the Asian session to witness the highest rise since August 13, when it tested the highest since April 12, 2013 amid the negative stability of the US dollar index, indicating a rebound for the second session of The highest since the fifth of this month, according to the inverse relationship between them on the eve of developments and economic data expected on Thursday from the US economy, the largest economy in the world.

Gold futures for December 15 rose 0.29% to trade at $ 1,513.10 an ounce, compared with the opening at $ 1,518.36 an ounce, amid the US dollar index down 0.02% to 97.93 compared to the opening at 97.95.

Investors are now awaiting the US economy to unveil retail sales, which account for about half of consumer spending, which accounts for more than two-thirds of US GDP, which may reflect a slowdown in growth to 0.3% from 0.4% last June. The core index of growth stabilized at 0.4%, little changed from June.

This comes in conjunction with the release of the preliminary reading of the single labor cost index, which reflects a rise of 1.7% versus a decline of 1.6% in the first quarter, while the preliminary reading of the productivity of non-agricultural sectors may show slower growth to 1.4% compared to 3.4% in the first quarter, in conjunction with The release of the Claims Index which may show an increase of 3 thousand applications to 212 thousand applications during the week elapsed last Saturday.

Markets from the world's largest industrialized countries are also looking to reveal the Philadelphia Industrial Index, which may reflect a contraction of 10.1 vs. 21.8 in July, and the release of the New York Industrial Index, which may also show a contraction of 2.1 vs. 4.3 v. July, ahead of the release of the Industrial Production which may show a 0.1% growth versus the zero level in June.

In the same context, the energy utilization rate reading may show growth slowed to 77.8% vs. 77.9% in June, before the housing market data was released with the housing index released by the National Association of Home Builders which may reflect an upward trend. It stood at 66 vs. 65 in July, coinciding with the release of wholesale inventories which may show a slowdown in growth to 0.1% vs. 0.3% in May.

Otherwise, on Wednesday we continued to break the yield on 10-year US Treasury securities for a short period of two-year treasury interest rates for the first time since 2007, reflecting a higher short-term, long-term yield on US Treasury funding. This raised concerns about a recession looming for the world's largest economy.

We also followed yesterday the contraction of the German economy, the euro zone's largest economy, by 0.1% in the second quarter. This came hours after the National Bureau of Statistics of China released the annual reading of industrial production, which showed the slowest pace of growth since 2002, with the slowdown in retail sales growth and high Unemployment last July, reinforcing investor concerns about the performance of the global economy in the shadow of trade protectionism.

It is noteworthy that the US Treasury announced last Tuesday to postpone the date of activating the imposition of customs tariffs 10% on US imports of some Chinese goods until December 15, which was supposed to enter into force early next month, commented US President Donald Trump At the time, the decision to postpone was aimed at boosting shopping in the Christmas season, while expressing that contacts with the Chinese side had been constructive recently.

Technical Analysis

The price of gold traded strongly yesterday to settle above the 1520.00 barrier now, reinforcing expectations for further gains in the coming period, awaiting a visit to the 1560.00 level, which is our next major target.

SMA 50 continues to support the expected bullish wave, taking into consideration that the breach of 1483.60 will stop the suggested rally and press the price for further bearish correction.

Expected trading range for today is between 1510.00 support and 1545.00 resistance.

Expected trend for today: Bullish.