Gold Analysis 10.09.2019

Gold futures fell during the Asian session to see its fifth rebound from the highest since April 11, 2013 amid the positive stability of the US dollar index according to the inverse relationship between them following the developments and economic data that followed from the Chinese economy, the largest consumer of metals in the world and on the threshold of developments The economic data expected on Tuesday by the US economy, the largest economy in the world.

At 0411 am GMT gold for December delivery fell 0.72% to trade at $ 1491.12 an ounce, showing the lowest since August 13 compared with the opening at $ 1498.11 an ounce, knowing that the contracts started the trading session on A bearish price gap after yesterday's close at $ 1,511.10 per ounce, amid the dollar index rose 0.05% to 98.38 compared to the opening at 98.33.

The Chinese economy continued to release inflation data with the release of the annual CPI figure, which showed growth steady at 2.8%, little changed from the prior yearly reading for July, beating expectations for a slowdown in growth to 2.6%. The Producer Price Index (CPI) widened to 0.8% vs. 0.3%, beating expectations for a 0.9% contraction.

Otherwise, we followed last weekend the People's Bank of China revealed that it bought 5.91 tons in August, bringing its total gold holdings to 62.45 million ounces, compared with 62.26 million ounces in July. The data reflected a recent slowdown in gold purchases by the bank, with average purchases since December last year at 11.75 tones.

On the other hand, investors are awaiting the US economy for the release of the employment and employment turnover, which may reflect a decline to 7.31 million compared to 7.35 million in June, following hours of US labor market data for August. Last Friday showed the unemployment rate stabilized for the third consecutive month at 3.7%, in line with expectations.

In the same context, we also followed last weekend's Average Hourly Earnings showing that the pace of growth accelerated to 0.4% compared to the previous reading for July and expectations of 0.3%, while the change in jobs index in sectors other than agriculture at the time showed a slowing pace of creation The number of jobs added to 130 thousand jobs compared to 159 thousand jobs added in July, contrary to expectations that indicated 163 thousand jobs added.

In another context, we followed up with the beginning of this week, US Treasury Secretary Stephen Mnuchin expressed that the US administration is considering to make new tax cuts during the next year, with reference to the expected that the trade agreement with Japan is expected to be completed soon and that trade negotiations with France are still US President Donald Trump prefers to continue to impose tariffs in the absence of a trade deal with China, he said.

US Treasury Secretary Manouchin said Monday that the US administration is ready to sign a trade deal with China in the event that it is in the interest of the United States, noting that the impact of the trade war on the US economy has not yet been noticed, adding that there is no reason to say that the position of Fed Governor Jerome Powell is not under threat.

US President Trump recently said his administration is considering expanding tax cuts later and that the Fed, which he and Powell have repeatedly criticized, should act proactively and cut interest rates on federal funds. The FOMC is scheduled to meet on 17-18. From September in Washington the committee is expected to offer a 25 basis point rate cut for the second consecutive meeting.

The worsening trade war between the world's two largest economies has recently reinforced investor fears about the pace of US and Chinese growth and the global economy as a result of the US administration's growing trade protectionism with many countries, led by China. The United States and China resumed their trade negotiations by early next month in Washington to ease market concerns.

Technical Analysis

Gold has succeeded in achieving our awaited target at 1493.80 and surpassed it to open the way for a visit to the major uptrend line at 1477.00, keeping the bearish trend dominating over the coming sessions, supported by negative pressure formed by SMA 50.

Thereby, we are waiting for further downside intraday, taking into consideration that a break of 1503.00 will stop the negative scenario and lead the price to start attempts to recover and restore the main bullish trend again.

Expected trading range for today is between 1477.00 support and 1503.00 resistance.

Expected trend for today: Bearish.