Gold Analysis 16.09.2019

Gold futures fluctuated in a narrow range, tilted lower during the Asian session to witness the bounce of the sixth session in nine sessions from the highest since April 10, 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 world's largest consumer of metals is on the cusp of economic developments and data expected on Monday by the US economy, the largest economy in the world.

At 04:59 AM GMT gold futures for December delivery rose 0.3% to trade at $ 1503.86 an ounce compared with the opening at 1500.52 an ounce, amid the US dollar index rose 0.04% to 98.16 compared to the opening at 98.12.

The National Bureau of Statistics (NBS) of China revealed the annualized retail sales figure which showed growth slowed to 7.5% vs. 7.6% in the prior year of July, contrary to expectations for an acceleration of growth to 7.9%. Growth to 4.4% vs. 4.8%, also worse than expectations at 5.2%, while the unemployment rate showed a decline to 5.2% vs. 5.3%.

Industrial production data for Asia's largest economy, the world's second largest economy and the world's second-largest industrialized country showed the slowest pace of growth in more than 17 years in August, following the worsening trade war between the world's two largest economies. It is now more than a year after the US Department of Trade Protectionism pursued with many international countries, especially China.

However, early this week, banks' reserve requirements by the People's Bank of China (CBB), announced earlier this month, came into effect. The mandatory reserve ratio for banks has been reduced by 50 basis points, and some eligible banks have been reduced. By 100 basis points, it is also planned to provide liquidity of 800 billion yuan, equivalent to $ 113 billion in the Chinese economy.

On the other hand, investors are awaiting the US economy, the largest industrial countries in the world, the release of the New York manufacturing index, which may show the contraction widened to 4.1 from 4.8 in August, and comes hours before the release of the industrial production index tomorrow, which may show a rise 0.2% versus a 0.2% decline in July, while the Energy Exploit Rate reading may reflect an acceleration of growth to 77.6% versus 77.5%.

Markets are also looking ahead to the FOMC meeting on Tuesday and Wednesday in Washington, which is expected to cut the federal funds rate by 25 basis points for the second consecutive meeting to between 1.75% and 2.00%. On the expectations of members of the Committee on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

Federal Reserve Governor Jerome Powell is due to hold a press conference next Wednesday, half an hour after the FOMC meeting, which has been widely criticized by US President Donald Trump for demanding the Fed. And Powell's governorate cut interest rates "to zero or less."

Otherwise, gold futures benefited earlier this week from the recent geopolitical strikes from last weekend's drone attacks on oil production facilities in Saudi Arabia, the world's largest oil exporter, and OPEC. The world's third-largest oil producer and OPEC's largest, carried out by the Houthi rebels in Yemen.

President Trump said Sunday that the United States was "locked and loaded based on an investigation" that Iran had launched a major Saudi oil attack, and several US administration officials also expressed yesterday that they had strong evidence that Iran was behind the attack. It is not the Houthi rebels in Yemen who claimed responsibility last Saturday, prompting investors to divert liquidity to safe havens.

Technical Analysis

The price of gold has tested the bullish trend line and maintains its stability above it, starting today with a bullish slope to move around SMA 50, which keeps the bullish scenario valid and active for the next period, waiting for breaching 1524.00 to facilitate the task of heading towards 1555.00 which is our next main target.

Stochastic supports our positive expectations, which require stability above 1485.00.

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

Expected trend for today: Bullish.