Gold Analysis 17.10.2019

Gold futures fluctuated in a narrow range tilted to decline during the Asian session 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 the US economy, the largest economy in the world, which includes the speech of members of the Federal Open Market Committee and amid the aspiration to launch The EU summit in Brussels is taking place amid hopes of an agreement on an orderly Brexit.

At 04:12 am GMT gold futures for December delivery fell 0.14% to trade at $ 1,492.10 per ounce compared with the opening at $ 1,494.20 per ounce, amid the US dollar index rose 0.01% to 98.01 compared to the opening at 98.00.

Investors are currently awaiting the US economy to reveal the housing market data with the release of the Housing Starts and Building Permits for September and expectations that building permits will fall 5.8% to 1.34 million versus a rise of 7.7% at 1.43 million in August. Housing starts may also show a decline of 3.2% to 1.32 million from a decline of 12.3% at 1.36 million.

This also comes in conjunction with the release of the index of claims for the last week on the 12th of this month, which may reflect an increase of 2,000 applications to 212 thousand applications compared to 210 thousand applications in the previous weekly reading, while the reading of the claims applications index may show investors for the week that ended on the fifth of This month, a decrease of 14 thousand applications to 1,670 thousand applications compared to 1,684 thousand applications.

Markets from the world's largest industrialized nations are also eyeing the release of the Philly Fed Manufacturing Index, which may reflect a contraction in the expansion to 7.3 from 12.0 in September, before we see the release of the industrial production index which may show a 0.1% decline versus a rise. 0.6% in August, while the Energy Exploitation Rate reading may show a slowdown in growth to 77.7% versus 77.9% in August.

FOMC Fed Governor Michelle Bowman and Chicago Fed President Charles Evans speak at the Federal Reserve Bank of Chicago listening event, before we see another Federal Reserve Chairman, the Federal Reserve Bank of New York. John Williams at the Managed Funds Expectations Conference in New York.

On the other hand, US President Donald Trump said Wednesday that the trade agreement with China has been written and that the trade agreement between the two sides is currently being prepared, noting that the agreement was not signed until his next meeting by early next month in Chile with his Chinese counterpart. Xi Jinping, adding that China has already begun to buy American agricultural products.

Meanwhile, US Treasury Secretary Stephen Mnuchin also noted yesterday that US and Chinese trade negotiators are working on the text of the first phase of the trade agreement to be signed by the two heads of state next month at the Chile summit, while noting that there are no plans for another high-level meeting. The trade deal was set last week.

In another context, the markets are looking closely to the developments of the Brexit file, especially following the report which raised the hopes of investors recently about the imminent conclusion of an agreement allowing the orderly exit of Britain from the European Union, although there are still many doubts about it Among them is whether British Prime Minister Boris Johnson can ensure that his government and the British Parliament approve this exit plan in an orderly manner.

Technical Analysis

Gold has settled above 1485.00, but we note that SMA 50 has formed a strong resistance barrier to stop the positive price attempts, in conjunction with Stochastic reaching overbought areas now.

Therefore, these factors encourage us to continue to favor the bearishness over the coming sessions, whose next target is at 1447.00, taking into consideration that the breach of 1492.00 will push the price for more intraday gains and test the resistance of the descending channel around 1510.00 before any new attempt to decline.

Expected trading range for today is between 1465.00 support and 1500.00 resistance.

Expected trend for today: Bearish.