Gold Analysis 19.11.2019

Gold futures fluctuated in a narrow range, tilted lower during the Asian session to witness the rebound from the highest since November 7, ignoring the decline of the US dollar index for the fifth consecutive session from the highest since October 15, according to the inverse relationship between them Following the release of the Bank of Japan's semi-annual report on currency and monetary control and the release of the minutes of the recent RBA meeting and on the eve of economic developments and data expected Tuesday by the US economy.

At 04:31 am GMT, gold futures for December delivery fell 0.08% to trade at $ 1,470.70 an ounce compared with the opening at $ 1,471.90 an ounce, while the US dollar index fell 0.02% to 97.80 compared to the opening at 97.82.

Bank of Japan Governor Haruhiko Kuroda said through the Bank of Japan's semi-annual report on currency and monetary control that the Bank of Japan can deepen negative interest rates, explaining that the Bank of Japan could adopt deepening negative rates beyond -0.1%, adding that it did not He says the Bank of Japan can cut interest rates indefinitely and has unlimited ammunition to cut them.

BoJ Governor Kuroda also noted through the Bank of Japan's semi-annual report on currency and monetary control that the Japanese economy provides momentum to the BoJ's inflation target and that strong quantitative easing and monetary easing policies will continue, adding that the Bank of Japan's monetary policy makers are weighing costs And the benefits of quantitative easing and monetary easing.

In another context, the Reserve Bank of Australia revealed the minutes of the Reserve Bank of Australia meeting held on the 5th of this month, during which the short-term benchmark interest rates were set at an all-time low of 0.75%. The Australian central bank expands monetary policy easing if needed.

On the other hand, investors are currently awaiting the US economy to release housing market data with the release of both housing starts and building permits and amid expectations that building permits will decline to 0.8% to about 1,381 thousand permits versus 2.7% at 1,387 thousand in September. September, while the start of construction may reflect a rise of 4.9% to about 1,318 thousand homes compared to a decline of 9.4% at 1,256 thousand homes.

The Federal Open Market Committee (FOMC) and New York Federal Reserve Chairman John Williams spoke at the Capital Markets Conference sponsored by the Securities and Financial Markets Industry Association in Washington, DC, hours after US President Donald Trump met with the Federal Reserve Governor. Jerome Powell at the White House in an unplanned meeting.

Earlier this week, US President Trump invited Powell to discuss the state of the domestic economy, particularly the pace of growth and inflation, as well as employment rates. The meeting included US Treasury Secretary Stephen Menushin, and Trump said the meeting was very good. Several topics were discussed including interest rates, negative interest rates and inflation.

President Trump also said that he also discussed during his meeting with Powell Governor Powell and Treasury Secretary Minouchn his country's trade relations with China as well as the strength of the US dollar and the impact on the industrial sector of the world's largest industrialized country, unlike many other issues and comments. Powell on the meeting is consistent with his recent testimony before Congress and did not address the expectations of monetary policy.

In the same vein, Fed Governor Powell reaffirmed that the course of monetary policy depends primarily on economic data and that members of the Federal Open Market Committee approve monetary policy as required by law to support maximum employment and price stability and that they rely in their decisions on careful analysis Objective, not political.

Last week, Powell noted the Fed's semi-annual testimony to Congress that his economy is in good shape, growth is moderate and the labor market is strong and he does not expect a looming economic catastrophe. This year, he said, adding that members of the Federal Reserve are currently assessing three rate cuts recently and their impact on the economy.

In the same context, the markets are looking forward on Wednesday to reveal the minutes of the Federal Open Market Committee meeting held on October 29-30 during which it approved the reduction of interest rates for the third time in a row by 25 basis points to between 1.50% and 1.75%, Amid the suggestion that a subsequent monetary policy adjustment would require significant and sustained inflationary movement to consider resuming interest rate hikes.

Otherwise, we followed the White House extension of licenses that allow US companies to do business with Huawei, raising hopes of resolving trade disputes between Washington and Beijing and boosting investor risk appetite. The failure of the US administration to abolish tariffs in turn has dampened hopes of containing the trade war between the two sides.

On Saturday morning, Chinese Vice Premier Liu Hu held a telephone conversation with US Treasury Secretary Mnuchen and US Trade Representative Robert Leitzer on the "Phase I" deal, according to Chinese state media. They held "constructive talks" about their "fundamental concerns" and agreed to keep in close contact.

We would like to point out that the spokesman of the Chinese Ministry of Commerce, Gao Feng Noh, said last Thursday that both China and the US are in deep discussions on the "first phase" deal. It must end with the elimination of these additional tariffs, "he said." This is an important condition for both parties to reach an agreement. "

Meanwhile, White House economic adviser Larry Kudlow also noted Thursday that Washington was "approaching" a trade deal with Beijing. Some of the report recently touched on the postponement of a planned meeting between US President Donald Trump and his Chinese counterpart Xi Jinping to sign an interim trade agreement from time to time. Later this month to next month, the date or venue of their upcoming meeting has yet to be revealed.

Technical Analysis

The price of gold is fluctuating around the resistance of the descending channel and holding it below it so far, in conjunction with the emergence of clear negative signals through the stochastic indicator, which supports the chances of bouncing downwards to resume the expected bearish trend over the intraday basis, whose targets start with testing 1447.00.

SMA 50 supports the bearish outlook, noting that exceeding the mentioned target will push the price to 1413.10 as the next stop, while a break of 1472.00 will lead the price to test the pivotal resistance at 1489.00 before any fresh attempt to fall.

Expected trading range for today is between 1447.00 support and 1480.00 resistance.

Expected trend for today: Bearish.