Gold Analysis 05.09.2019

Gold futures fluctuated in a narrow range, tilted lower during the Asian session to witness the rebound for the second session from the highest since April 11, 2013 amid the rise of the US dollar index for the first time in three sessions according to the inverse relationship between them on the eve of developments and economic data expected today Thursday by the US economy following China's announcement of a new round of trade talks with the United States.

Gold futures for December delivery fell 0.51% to currently trade at $ 1544.62 an ounce compared with the opening at $ 1551.26 an ounce, amid the US dollar index rose 0.09% to 98.49 compared to the opening at 98.40.

Investors in the US economy are looking ahead to the release of preliminary labor market data with the release of the change in the private sector jobs index which may reflect the slowing pace of job creation to 148 thousand jobs compared to 156 thousand jobs in July, hours before The monthly report on non-farm payrolls and unemployment rates as well as the hourly income rate for August.

This comes before we also witnessed by the largest economy in the world to reveal the final reading of the productivity index and the cost of one work, and is expected to show the productivity index slower growth to 2.2% compared to 2.3% growth in the initial reading for the second quarter and against 3.4% growth in the previous reading For the first quarter, while the cost index reading may show growth accelerated to 2.5% compared to 2.4% in the initial reading and against a contraction of 1.6% in the first quarter.

This comes in conjunction with the release of the jobless claims figure for the past week at the end of August, which may reflect stability at 215K, unchanged from the previous weekly reading, while the jobless claims reading for the week past August 24 may show a decline. 10 thousand applications to 1,688 thousand applications compared to 1,698 thousand applications in the previous weekly reading.

The Markit Institute for Services PMI final reading for the US may reflect an expansion to 51.0 compared to 50.9 in August and 53.0 in July, before the ISI reading may be released. It expanded to 54.0 from 53.7 in July, coinciding with the release of factory orders which could show growth accelerated to 1.0% from 0.6% in June.

Otherwise, we followed up yesterday with Beijing reporting that it will hold trade talks with Washington next October. In another context, the British parliament rejected Prime Minister Boris Johnson's request for early elections and further steps to block Britain's exit from the EU without agreement, Yesterday, we also followed Hong Kong's leader, Carrie Lam, formally withdrawing controversial legislation that would have allowed extradition to China.

Technical Analysis

The bullish gold rally stopped at 1557.00 to show a bearish bias as the stochastic negated, where it tested the bullish channel that is now showing and waiting for a positive incentive to push the price to resume the main bullish trend.

In general, we continue to favor the overall bullish trend provided it holds above 1531.75, noting that we are waiting for a breach of 1560.00 to open the way towards 1600.00 which is our next main target.

Expected trading range for today is between 1535.00 support and 1560.00 resistance.

Expected trend for today: Bullish.