Gold Analysis 05.11.2019

Gold futures fluctuated in a narrow range tilted lower during the Asian session amid the rise of the US dollar index, indicating a rebound for the third session of the lowest since August 9, when it tested the lowest since July 19 last, according to the inverse relationship between them On the eve of economic developments and data expected on Tuesday by the US economy and in the shadow of trade optimism between Washington and Beijing.

At 03:50 am GMT gold prices fell 0.59% to trade at $ 1,502.28 an ounce compared to the opening at $ 1,508.84 an ounce, with the US dollar index up 0.08% to 97.62 compared to the opening at 97.54.

Investors in the US economy are awaiting the release of the Trade Balance, which may reflect a narrowing of the deficit to $ 52.9 billion from $ 54.9 billion in August, ahead of the US Markit Institute's ISM final reading. It reflects the stability of the expansion at 51.0, little changed from the initial reading for October and against 50.9 in September.

As for the ISM reading, which may show a widening of 53.5 vs. 52.6 in September, we should note that the service supply is important because the US service sector accounts for more than two-thirds of GDP. With the release of a statistical reading of jobs and turnover, which may reflect a rise to 7.06 million compared to 7.05 million in August.

Otherwise, we have recently followed US Secretary of Commerce Wilbur Ross that the first phase trade agreement between his country and China could be reached and that US President Donald Trump and his Chinese counterpart Xi Jinping signed the agreement this month in one of several locations, including Iowa, Alaska and Hawaii or somewhere in China, before announcing licenses for US companies to resume sales to Chinese Huawei.

White House economic adviser Larry Kudlow noted Friday that markets were waiting for a meeting between the US president and his Chinese counterpart, noting that recent official statements from China appeared to be more positive than in the past, adding that this was an indication of an agreement. The first phase of the agreement is complete. US tariffs on Chinese goods will remain.

White House economic adviser Kudlo said at the end of last week that the issue of forced technological transfer could be addressed during the second phase of the agreement, the comments came after the report, which addressed the Chinese officials announced their skepticism of a long-term trade agreement with the United States, despite their emphasis on Progress in the first phase talks.

It is worth mentioning that these developments, which reinforced optimism about the resolution of trade disputes between the United States and China after the trade war between the two parties, which exceeded its first year recently, has stimulated the appetite of risk among investors, which reflected positively on global stock indices, especially the US, which ended yesterday's trading on New record highs as liquidity is diverted from safe havens topped by gold.

Technical Analysis

The price of gold did not show any strong movement yesterday, moving near the 50 EMA, noting that the Stochastic is getting rid of its negative momentum and reaching overbought areas, while EMA50 continues to support the price from below.

Therefore, these factors support the chances of rebounding upwards to resume the expected bullish trend for the coming period, targeting 1535.00 levels and then 1555.00 as the next major stops, noting the importance of stability above 1489.00 to achieve the suggested targets.

Expected trading range for today is between 1490.00 support and 1525.00 resistance

Expected trend for today: Bullish