Gold Analysis 08.10.2019

Gold futures fluctuated in a narrow range, tilted lower during the Asian session, shrugging off the decline of the US dollar index for the fifth session in six sessions from its highest since May 12, 2017 The US economy accepted the largest economy in the world which includes the speech of Fed Governor Jerome Powell.

Gold futures for December delivery fell 0.17% to trade at $ 1491.70 an ounce compared to the opening at $ 1493.40 an ounce, while the dollar index fell 0.01% to 98.97 compared to the opening at 98.98.

Investors are awaiting the US economy to release the PPI reading, a preliminary indicator of inflationary pressures that may reflect a stable growth of 0.1%, little changed from August, while a core reading of the index itself may show slower growth. To 0.3% vs. 0.2%, as the annual reading of the same index may show the stability of growth at 1.8%.

In the same context, the core annual PPI reading may reflect a stable growth rate of 2.3%, little changed from the previous annual reading in August, before we see the FOMC member and Chicago Fed Chairman Charles. Evans at the Chicago Rotary Lunch.

Federal Reserve Governor Jerome Powell delivered a speech titled "A Look from the Federal Reserve" at the annual meeting of the National Association of Business Economics in Denver, hours after Powell expressed the importance of the Fed's independence away from politics, and before his participation tomorrow. In a panel discussion the Federal Reserve listens in Kansas City.

Also on Wednesday, the markets are looking forward to the release of the minutes of the FOMC meeting held on September 17-18, during which it was decided to cut interest rates on federal funds for the second time in a row by 25 basis points to between 1.75% and 2.00%. This came in line with the expectations, with the disclosure at the time of the Committee's expectations on growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

On the other hand, the markets are looking forward to the launch of high-level trade talks between the US and China in Washington on Thursday and Friday as part of efforts to resolve the trade disputes between them before the expected escalation of the trade war between them by the middle of this month. Chinese goods worth $ 250 billion to 30% from 25% on the 15th of this month.

In the same vein, we have followed China's assertion that Chinese Vice Premier Liu Hu and Governor of the People's Bank of China (PBOC) Yi Gang will go to Washington for the October 10-11 talks, boosting investor hopes for the two sides to reach a conclusion. To settle in one way or another limit the escalation of the trade war between the two largest economies in the world.

US President Donald Trump said Friday that he believes there is a good chance of reaching a trade deal with China. He said that when he talks with leaders of other countries, he is doing the right way, amid concerns that some opposition Democratic Party members are for his ruling Republican Party, they may hinder the efforts being made to reach an agreement with China.

Technical Analysis

Gold is trading at the first pivotal support of 1489.00, and the price is under pressure to move below SMA 50, while Stochastic reaches oversold areas to provide positive support for the price.

Thus, the conflict between technical factors still exists, and the price needs to breach one of the pivotal levels of support 1485.00 and resistance 1530.00 to determine its next destination more accurately, noting that breaking the mentioned support will press the price to achieve the downside corrective targets extended to 1447.00 then 1413.10, while A break of resistance will confirm the return of the pair to the main bullish trend, whose targets start at 1555.00.

Expected trading range for today is between 1475.00 support and 1515.00 resistance.

Expected trend for today: Neutral.