Gold Analysis 15.10.2019

Gold futures fluctuated in a narrow range, tilted lower during the Asian session, ignoring the decline of the dollar index for the seventh session in eleven sessions from the highest since May 12, 2017 according to the inverse relationship between them after the developments and economic data that followed on Tuesday China's economy is the world's largest consumer of metals and is looking forward to the outcome of the FOMC speech.

Gold futures for December delivery fell 0.04% to trade at $ 1,491.50 an ounce compared to the opening at $ 1,492.32 an ounce, while the US dollar index fell 0.05% to 98.40 compared to the opening at 98.45.

The Reserve Bank of Australia unveiled the minutes of its meeting in early October, during which the RBA monetary policy makers decided to resume short-term interest rates by 25 basis points to an all-time low of 0.75%. Following its confirmation at the previous meeting of that meeting and following a 25 basis point reduction twice earlier this year.

We would like to point out that the RBA monetary policy makers expressed through the minutes that they are prepared to relax monetary policy more broadly if they are prepared to support growth and employment rates, and that it makes sense to expect them to need an extended period of low interest rates, amid reports that they have noticed To cut interest rates globally, explaining that they discussed the chances that the rate cut might have less impact than it was before.

Monetary policy makers also noted through the minutes that the purpose of the rate cut at a meeting earlier this month is to strengthen the starting point of the economy, explaining that the recent economic data revealed that the balance was on the softer side, with the statement that they discussed the issue of staying on Interest rates are low in emergencies and low interest rates are best to minimize the effects of any adverse shock.

This came before the Bank of Japan Governor Haruhiko Kuroda expressed the fact that inflationary pressures are hovering around 0.5% and that the Bank of Japan will continue to expand its monetary base until inflation steadily exceeds the inflation target of 2%. Long and long term at very low levels for an extended period, adding at least until the spring of 2020.

China's inflation data showed a mixed performance in September with the annual CPI reading accelerating to 3.0% vs. 2.8% in August, beating expectations of 2.9%, while the annualized CPI reading Producers, which is a preliminary indicator of inflationary pressures, deflation widened to 1.2% in line with expectations against 1.2% in August.

On Monday, US Treasury Secretary Stephen Mnuchen told CNN-C that US and China made "significant progress" last week in the high-level trade negotiations held last Thursday and Friday in Washington, adding that he expected US President Donald Trump and his Chinese counterpart Xi Jinping will finalize the agreement at a summit in Chile next month.

This came after President Trump announced that the US and China agreed on the outlines of a deal that could be signed early next month. It is noteworthy that the recent trade talks between the two sides resulted in a trade agreement "phase one" as part of an expanded trade agreement. Washington will not do its decision to raise tariffs on Chinese goods worth 250 billion to 30 percent from 25 percent by the middle of this month.

On the other hand, Beijing is expected to make purchases of expanded US agricultural products and take steps to protect intellectual property protection and financial services as well as not weaken the Chinese yuan in order to gain a competitive trade advantage. While the freeze of the decision to raise tariffs and the commitment to expand the purchase of agricultural products were not mentioned.

On the other hand, we also followed last weekend's remarks by British Prime Minister Boris Johnson that despite the fact that no agreement has yet been reached between Britain and the European Union, it is moving forward towards an agreement on an orderly exit from Britain. The EU is on schedule by this month, saying that an agreement with Brussels would be beneficial not only to his country but to all parties in Europe.

The comments came hours after British Prime Minister Johnson and Irish leader Leo Faradkar confirmed the possibility of reaching an exit deal following talks on Thursday, boosting market hopes for eventual access. Last Sunday, more work was needed to secure an agreement on an orderly Brexit.

Technical Analysis

Gold is testing the 50 SMA, which is a minor resistance at 1497.00, and remains confined between the pivotal levels of 1485.00 support and 1512.00 resistance.

Recall that breaking the mentioned support will put the price under strong negative pressure starting at 1447.00 and extending to 1413.10, while breaching the resistance will lead the price to regain the main bullish trend, where the first target is at 1555.00.

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

Expected trend for today: Neutral