Gold analysis 03.10.2019

Gold futures fluctuated in a narrow range tilted lower during the Asian session to witness the bounce for the fourth session in eight sessions from the highest since September 5 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 on Thursday before The US economy is the largest economy in the world, which includes FOMC members' talk and in the shadow of market pricing of global trade tensions.

Gold futures for December delivery fell 0.02% to trade at $ 1498.26 an ounce compared with the opening at $ 1498.99 an ounce amid the US dollar index rose 0.01% to 99.04 compared to the opening at 99.03.

Investors are now awaiting the outcome of Chicago Fed President Charles Evans' speech on monetary policy in the central banking chain of the Global Accreditation Center in the Spanish capital, Madrid, before we see Fed Governor Randall Quarles delivering a speech entitled “Stability Board”. In 10 years "at the European Banking Summit in Brussels.

This comes in conjunction with the release of the US claims for the past week on September 28, which may reflect an increase of 2,000 applications to 215 thousand applications compared to 213 thousand applications in the previous weekly reading, as may read the index of claims applications for investors for the past week on 21 From last month, an increase of 4 thousand applications to 1,654 thousand applications against 1,650 thousand applications.

The US Markit Services PMI final reading from the US may reflect a steady expansion at 50.9, little changed from the initial reading for September and 50.7 in August, before the ISM reading was released. Expansion may show contraction to 55.1 versus 56.4 in August.

Markets from the world's largest industrialized nations are also eyeing the factory orders figure, which could show a 0.5% decline versus a 1.4% rise in July, before we see another FOMC member and Fed Vice Governor Richard Clarda speaking. He is expected to speak about the economy and monetary policy at the event hosted by the Wall Street Journal in New York.

On the other hand, investors are waiting for the release of the US labor market data tomorrow, before we see Fed Governor Jerome Powell opening remarks at a Fed listening event hosted by the Federal Reserve in Washington, in which several Fed members will also speak amid growing Expectations for the Federal Reserve to move forward for the third time in a row at the end of this month following a series of disappointing economic data.

It is noteworthy that US President Donald Trump on Tuesday expressed that the Federal Reserve's monetary policy and the strength of the dollar are the reason behind the weak performance of the industrial sector in his country, pointing out that the Federal Reserve and his Governor Powell allowed the dollar to rise against other currencies, which negatively affected American manufacturers. He added that the interest rate on federal funds is very high and that the Federal Reserve is hostile to those decisions.

President Trump's tweets on his official Twitter account renewing his attack on the Federal Reserve and Powell's monetary policy came after Tuesday's ISM manufacturing index showed deflation widened to 47.8 from 49.1 in August, contrary to expectations. Widening at 50.4, reflecting the worst performance of the index since June 2009.

In view of global trade developments, we followed on Wednesday the World Trade Organization (WTO) issued a ruling allowing the United States to impose duties on its imports from the European Union amounting to about $ 7.5 billion per year due to the European Union's illegal financial support for the European aircraft manufacturer Airbus. US goods will be levied on EU goods by October 18.

The escalation of US trade protectionism with the EU has renewed market concerns about global trade tensions, coinciding with the prospect of a new round of high-level trade talks between the world's two largest economies by next week in Washington aimed at resolving trade disputes between the United States and China. As part of efforts to curb the growing trade war between Washington and Beijing.

Technical analysis

Gold stabilized around 1500.00 after yesterday's bullish rally, as it tries to regain the main bullish trend again and stop the bearish correction started recently, but in contrast, we note that the price is still below the previously broken uptrend main line, along with the stochastic indicator shows Signals are clearly overbought.

Thus, this inconsistency between technical factors makes us prefer to remain neutral until we get a clearer signal for the next trend, noting that breaking 1485.00 will put the price under negative pressure again, targeting 1447.00 then 1413.10 mainly, while a break of 1524.50 will lead the price to achieve Further gains and the restoration of the main bullish trend with its first target at 1555.00.

Expected trading range for today is between 1480.00 support and 1524.00 resistance.

Expected trend for today: Neutral.