Gold analysis 02.12.2019

Gold futures fluctuated in a narrow range tilted lower during the Asian session amid the rise of the US dollar index according to the inverse relationship between them after the developments and economic data that followed during the weekend on China's economy, the largest consumer of metals in the world and on the eve of developments and economic data expected Monday The US economy is the largest in the world.

At 04:05 AM GMT gold futures for February delivery fell 0.37% to trade at $ 1,464.90 an ounce compared to the opening at $ 1,470.30 an ounce, knowing that the contracts started the session on a falling price gap after the close of the week And last month at $ 1,472.70 an ounce, with the US dollar index rose 0.05% to 98.32 compared to the opening at 98.28.

Last Saturday, the China Federation of Logistics and Purchasing (CFLP) revealed the readings of the manufacturing and service PMIs which reported that the industrial sector expanded to 50.2 versus a contraction of 49.3 in the previous reading last October, contrary to expectations that the contraction would shrink to 49.5. The services sector expanded to 54.4 from 52.8 in October, beating expectations of 53.1.

The Chinese government wants the US administration to drop tariffs on Chinese goods and commodities as part of the first phase of a trade agreement between the two parties as part of efforts to curb the growing trade war between the two largest economies, the Global Times reported Sunday. Two industrialized countries in the world that have passed their first year recently.

This came in conjunction with the continuing unrest in Hong Kong, and it is noteworthy that US President Donald Trump last Wednesday signed a bill to support protesters in Hong Kong, which China denounced last weekend, where we followed last Friday the Chinese Foreign Ministry's statements that Beijing will take "Strong countermeasures" against Washington, hours after other ministry statements that Washington had "evil intentions."

On the other hand, investors are awaiting the US economy to reveal the final reading of the manufacturing PMI by Markit from the US which may reflect the stability of the expansion at 52.2, little changed from the initial reading of last month and against 51.3 in October. Before we saw the release of the construction spending index, which reflects the slowdown in growth to 0.3% compared to 0.5% last September.

This comes in conjunction with the revelation by the world's largest industrialized countries that the ISM reading could show contraction shrinking to 49.2 vs. 48.3 in October. Its value was 47.0 versus 45.5 in October.

Technical Analysis

The price of gold has breached the resistance of the descending sub-channel, but starts today with a bearish slope on its way back to this channel, where the moving average formed 50 negative pressure against the price, noting that the stochastic is losing its positive momentum to reach overbought areas.

Therefore, these factors encourage us to favor the bearish bias for today, noting that our first target is at 1447.00, where breaking the impulse key towards 1413.10 as the next stop, while the overall bearish trend will remain intact unless breaching 1489.10 level and holding above it.

Expected trading range for today is between 1440.00 support and 1470.00 resistance.

Expected trend for today: Bearish.