Gold Analysis 12.09.2019

Gold futures fluctuated in a narrow range tilted lower during the Asian session to witness the bounce for the fifth session in seven sessions from the highest since April 10, 2013 amid the positive stability of the US dollar index according to the inverse relationship between them on the eve of developments and economic data expected today Thursday by the Eurozone economies and the US largest economy in the world and in the wake of recent trade developments between Washington and Beijing.

At 04:47 am GMT, gold futures for December delivery fell 0.15% to a low of 1488.98 and then to rise and trade at $ 1496.51 an ounce compared to the opening at 1469.56 an ounce, amid the dollar index rose 0.01% to 98.64 Compared to the opening at 98.63.

Markets for the euro zone's largest economy, Germany, are awaiting the release of the final CPI reading, which may reflect a steady contraction of 0.2%, unchanged from the prior initial reading for August and against 0.5% growth in July, before the final reading is revealed. The index is similar to France, the second largest economy in the region, which could reflect a stable growth of 0.5% versus a contraction of 0.2% in July.

This comes before the third largest economy in the region is witnessing the release of the Unemployment Rate, which may reflect a decline to 10.0% vs. 10.4% in the first quarter, and before the release of the seasonally adjusted reading of the industrial production index for the euro area as a whole, which may reflect a decline in the decline to 0.1% The annual reading of the same index may show that the decline narrowed to 1.3% from 2.6%.

Up to the ECB meeting and the press conference of ECB Governor Mario Draghi from which ECB monetary policymakers are expected to introduce short-term benchmark interest rates to a negative level and announce new expansionary measures and likely resumed quantitative easing policies to support The pace of growth of the eurozone economies.

Otherwise, investors are awaiting the US economy to reveal inflation data with the release of the CPI reading which may reflect a slowdown in growth to 0.1% vs. 0.3% in July, and the core reading of the same index may also show growth slowed to 0.2% vs. 0.3%. While the annual reading of the same index may show the stability of growth at 1.8%, and the core annual reading of the same index may reflect the acceleration of growth to 2.3% vs. 2.2%.

This comes in conjunction with the release of the index of claims for the past week on September 7, which may reflect a decrease of 2 thousand applications to 215 thousand applications compared to 217 thousand tabs the previous weekly reading, while the reading of the claims application index may show investors for the past week at the end of Last August, an increase of 13 thousand applications to 1,675 thousand applications compared to 1,662 thousand applications in the previous weekly reading.

US President Donald Trump postponed a $ 250 billion tariff increase on Chinese goods from 25 percent to 30 percent for nearly two weeks as a "goodwill gesture" until October 15. To enter into force early next month, announcing it through his Twitter through his official Twitter account.

"At the request of Chinese Vice Premier Liu Hu, and given the fact that the People's Republic of China will celebrate its 70th anniversary on October 1, they agreed, as a goodwill gesture, to carry forward the tariff increase on goods," Trump said. Worth $ 250 billion, from October 1st to October 15th. "

This came hours after the Chinese Ministry of Finance announced on Wednesday that 16 categories of US products will be exempted from 25% tariffs, which have been applied since last year, including those of animal feed and some oils. The customs tariffs will start from September 17 for a year to expire on September 16, 2020.

These trade developments have in some way stimulated investors' appetite for risk and raised hopes of resolving trade disputes between the world's two largest economies ahead of the upcoming US-China trade talks in Washington early next month. Some observers of the trade war between the two sides and analysts of the conflict The existing trade remains skeptical that the two sides have reached a trade agreement in that round of trade talks.

Otherwise, US President Trump renewed his criticism yesterday to the Federal Reserve and its governor, Jerome Powell, and demanded a Fed rate cut of "zero or less," less than a week before the September 17-18 FOMC meeting, which is expected To reveal the expectations of the members of the Committee on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Technical Analysis

The price of gold carried out a retest of the previously broken support that appears in the picture and keeps its stability below it, accompanied by the emergence of a negative signal through Stochastic, waiting to stimulate the price to resume the bearish bias during the coming sessions, noting that our next target is at 1480.00, which represents a break The key to extend the bearish wave to reach 1450.00.

Keep in mind that a break of 1498.00 will stop the expected decline and push the price to resume the bullish main trend again.

Expected trading range for today is between 1477.00 support and 1500.00 resistance.

Expected trend for today: Bearish.