Gold Analysis 24.10.2019

Gold futures fluctuated in a narrow, bullish range during the Asian session amid the decline of the US dollar index for the 13th session in 18 sessions from the highest since May 12, 2017 according to the inverse relationship between them on the eve of developments and economic data expected on Thursday By the Eurozone economies and the US largest economy in the world, which includes the ECB meeting and the recent press conference of the ECB Governor Mario Draghi before the end of the term by the end of this month.

At 03:32 am GMT, gold prices fell 0.03% to trade at $ 1,490.60 an ounce compared to the opening at $ 1,491.46 an ounce, with the US dollar index down 0.02% to 97.44 compared to the opening at 97.46.

Markets are looking ahead to the Spanish economy's Unemployment Rate reading, which could show a drop to 13.8% vs. 14.0% in the second quarter, before the French, German and regional economies see the preliminary Markit PMI reading. Industrial and services for the month which may reflect the shrinking service sector and the expansion of industrial in France, the shrinking service sector and the contraction of the industrial sector in Germany and the economies of the region as a whole.

This comes as global markets are eyeing the outcome of the ECB meeting which may keep ECB monetary policy makers at zero interest rates and maintain a marginal lending rate of 0.25% while keeping the deposit rate negative. This was followed by a reduction in the previous meeting with the announcement of new expansionary measures by next month.

Investors are also awaiting the ECB Governor Mario Draghi's press conference after the ECB meeting, his last press conference before his term expires at the end of this month and his succession to the post of former IMF President Christine Lagarde early next month and before reactivating the QE by 20. € 1 billion per month in November and the program continues as long as necessary.

On the other hand, investors are currently awaiting the US economy to release the Durable Goods Orders, which accounts for about half of consumer spending, which accounts for more than two-thirds of US GDP, which may reflect a 0.5% decline versus a 0.2% rise in August. In the past, the core reading of the index itself may show a 0.2% decline versus a 0.5% rise in August.

This comes in conjunction with the release of the index of claims for the last week on the 19th of this month, which may reflect an increase of two thousand applications to 216 thousand applications compared to 214 thousand applications in the previous weekly reading, while the reading of the claims application index may show investors for the past week on 12 of this The month decreased by 4 thousand applications to 1,675 thousand applications compared to 1,679 thousand applications.

Markets are also looking to reveal the preliminary reading of the US Manufacturing and Services PMI, amid expectations that the manufacturing sector will contract to 50.7 vs. 51.1 in September, while the preliminary reading of the Services PMI may show a widening of its value. 51.0 versus 50.9 in September.

The release of the US housing market data with the release of the new home sales index, which may reflect a decline of 0.4% to 710 thousand versus 7.1% rise at 713 thousand in August, comes before we see the US Treasury unveiled the federal budget reading which It could show a surplus of $ 83.5 billion versus a $ 200.3 billion deficit in August.

On Wednesday, the Chinese State Council expressed Beijing's determination to increase imports of US agricultural goods and products and keep the RMB exchange rate within a stable range and that Asia's largest and second largest economies after the United States will continue to support the stability of foreign investment and trade. This came hours before US Vice President Mike Pines made a speech in China on Thursday.

Earlier this week, US President Donald Trump said he hoped to sign a trade agreement with his Chinese counterpart Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in mid-April in Chile. Work to complete the partial trade agreement between Washington and Beijing, adding that China is currently buying American agricultural products.

Meanwhile, White House economic adviser Larry Kudlow said Monday that tariffs on Chinese goods could be abolished if the first phase of trade talks between Washington and Beijing is completed well, saying things look good and negotiations between the two sides are good. They still exist, adding that human rights are among the important files in the negotiations between America and China.

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.

Technical Analysis

The price of gold continues to fluctuate around SMA 50, and remains within the bearish corrective channel shown in the picture, noting that the stochastic is providing negative signals on the four-hour time frame.

Therefore, these factors encourage us to continue to favor the bearish trend over the coming period, whose targets start by breaking 1485.00 to confirm opening the way towards 1447.00 as the next main station, while stability below 1500.50 is an important condition to achieve.

Expected trading range for today is between 1475.00 support and 1500.00 resistance.

Expected trend for today: Bearish.