Gold Analysis 18.10.2019

Gold futures fluctuated in a narrow, bullish range during the Asian session amid the decline of the US dollar index for the tenth session in thirteen sessions from the highest since May 12, 2017 according to the inverse relationship after the developments and economic data that followed from the Chinese economy, the largest consumer US metals are on the threshold of economic developments and data expected on Friday by the US economy, the largest economy in the world, which includes the speech of members of the Federal Open Market Committee.

Morning gold futures for December delivery fell 0.02% to trade at $ 1,490.50 an ounce compared to the opening at $ 1,491.90 an ounce, with the US dollar index down 0.01% to 97.59 compared to the opening at 97.60.

The National Bureau of Statistics (NBS) revealed that the seasonally adjusted GDP for the third quarter showed that growth slowed to 1.5% in line with expectations against 1.6% in the second quarter, and the annual reading of the same index showed a slowdown in growth to 6.0% from 6.2%. In the prior quarterly reading, worse than expectations for a slower pace of growth to 6.1%.

In the same context, the Office also revealed the annual reading of the Retail Sales Index, which showed that the pace of growth accelerated to 7.8% in line with expectations, compared to 7.5% in the previous annual reading for the month of August, and the annual reading of industrial production accelerated to 5.8% 4.4%, beating expectations of 5.0%, while the Unemployment Rate stood at 5.2% in September.

On the other hand, investors are currently awaiting the release of leading indicators which may show 0.1% growth versus the zero level in August, in conjunction with Federal Reserve Bank of Kansas City President Esther George's speech at the Energy and Economy Conference. Hosted by the Denver branch of the bank, before we witness the Deputy Governor of the Federal Reserve Richard Clarda on economic expectations and monetary policy at the Chartered Income Management Conference on the stability of the financial analyst.

On Wednesday, US President Donald Trump said 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.

US Treasury Secretary Stephen Mnuchin also noted Wednesday that US and Chinese trade negotiators are working on the text of the first phase of the trade deal for the two heads of state to sign 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.

This comes in conjunction with the proceedings of the European Union summit in Brussels, which entered the second day in a row, which resulted on Thursday to reach a draft agreement on the Brexit of the European Union is expected to be voted by the British parliament tomorrow Saturday. Otherwise, markets are also looking To launch the meetings of the International Monetary Fund, which is attended by representatives of the Fund and representatives of the World Bank in Washington.

Technical Analysis

Gold has been floating around the 50 SMA since yesterday, and is floating within the descending channel shown, while the Stochastic is showing overbought signals now.

Therefore, we believe that chances are available for resuming the bearish corrective trend, where the next main target is at 1447.00, noting that the bearish path will remain valid unless the price pushes to breach the 1507.50 level and hold above it.

Expected trading range for today is between 1470.00 support and 1505.00 resistance.

Expected trend for today: Bearish.