Gold Analysis 22.10.2019

Gold futures fluctuated in a narrow range, tilted lower during the Asian session, ignoring the decline of the US dollar index for the twelfth session in fifteen sessions from the highest since May 12, 2017 according to the inverse relationship between them on the eve of developments and economic data expected today Tuesday by the US economy and amid hopes of a vote of the British parliament on the agreement of the exit of the United Kingdom from the European Union and with optimism about the chances of resolving trade disputes between Washington and Beijing.

At 03:32 am GMT, gold futures for December delivery rose 0.20% to trade at $ 1,484.85 an ounce compared with the opening at $ 1,484.63 an ounce, shrugging off the dollar index 0.01% to 97.30 compared to the opening at 97.31.

Investors in the US economy, the world's largest, are looking ahead to the release of the housing market data with the release of the Existing Home Sales which could show a 0.7% decline to 5.45 million homes versus a rise of 1.3% to 5.49 million in August. The Richmond Manufacturing Index is expected to show contraction shrinking to 7 vs. 9 last September.

On the other hand, we followed earlier this week US President Donald Trump expressed his hopes to sign a trade agreement with his Chinese counterpart Xi Jinping during the Asia-Pacific Economic Cooperation (APEC Summit) to be held early next month in Chile. Work to complete the partial trade agreement between Washington and Beijing, adding that China is currently buying US agricultural products.

White House economic adviser Larry Kudlow also said Monday that tariffs on Chinese goods could be abolished if the first phase of trade negotiations between the world's two largest economies is completed well, saying things look good and that negotiations Washington and Beijing still exist, adding that human rights are an important issue in these negotiations.

Chinese Vice Premier Liu Hu said Saturday that the United States and China have made "significant progress" in trade talks, following a partial trade agreement earlier this month, adding that both Washington and Beijing are working Signing a written agreement between them as a basis for resolving the existing trade disputes between the two parties.

In view of the developments in the Brexit file, markets are now looking forward to the British parliament's vote on the agreement reached last week by Prime Minister Boris Johnson with the EU on the orderly exit of the UK from the EU. Johnson extended the deadline for his country out of the union for three months.

It is noteworthy that the British parliament voted last Saturday by 322 votes to 306 votes on the amendment submitted by MP Oliver Litwin, which states that if the agreement reached by the Johnson government with the European Union is not officially ratified, in that case automatically does a law already passed in Parliament obliges the British Prime Minister to ask the European Union to postpone the departure date for three months from 31 October.

Technical Analysis

Gold managed to breach 1485.00 and close the daily candlestick below it, which supports our continuation of the bearish trend effectively in the coming period, paving the way for a visit to 1447.00, which represents the 38.2% Fibonacci correction level for the entire rise measured from 1269.50 to 1556.70.

Therefore, the bearish scenario will remain favored for today, supported by negative pressure from SMA 50, noting that the continuation of the expected decline requires stability below 1504.00.

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

Expected trend for today: Bearish.