Gold analysis 12.12.2019

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce for the fourth consecutive round from the lowest since December 2, amid the decline in the US dollar index to its lowest since August 9, according to the inverse relationship in the aftermath. The decisions and trends of the Federal Reserve are on the cusp of developments and economic data expected on Thursday by the economies of the euro area and the US economy in addition to the British parliamentary elections and the developments of the trade war between Washington and Beijing.

At exactly 04:06 AM GMT, the gold futures contracts for February delivery rose 0.03% to trade at $ 1,479.70 per ounce compared to the opening at $ 1,479.20 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday's trading was concluded At $ 1,475.00 per ounce, with the US dollar index down 0.04% to 97.04 compared to the opening at 97.08.

Yesterday, we watched the expiry of the FOMC meeting December 10-11, during which the Federal Reserve monetary policy makers decided to keep the short-term benchmark interest rates at between 1.50% and 1.75% for the second consecutive meeting with They revealed the Federal Commission's expectations for growth, inflation and unemployment rates as well as the future of interest on federal funds for the next three years.

The expectations of the members of the Federal Committee indicated that the Federal Reserve may keep interest rates during the next year 2020 unchanged, and in the same context, Federal Reserve Governor Jerome Powell noted during yesterday's press conference following the meeting’s activities that it is possible for the Federal Reserve to expand its activities Purchase short-term treasury bills if necessary to increase liquidity in the banking system.

It is reported that the Ministry of the Treasury launched in October a program to purchase treasury bills worth $ 60 billion per month and it is expected that this program will continue until the second half of 2020, which aims to provide liquidity after the expansion of interest in repo operations during September to 10%, which paid the reserve The Fed has been conducting repo operations over the past two months, and these are the purchase of short-term bonds and debt from banks and hedge funds.

Otherwise, investors are currently awaiting by the US economy, the largest economy in the world, to reveal the reading of the producer price index, which is an initial indication of inflationary pressures, which may reflect a slowdown in the pace of growth to 0.2% compared to 0.4% in October, as the substantial reading of the index may The same growth rate slowed to 0.2%, compared to 0.3% in October.

In the same context, the annual reading of the producer price index may reflect the acceleration of growth to 1.3% compared to 1.1% in October, as the substantial annual reading of the same price index may indicate the acceleration of growth to 1.7% against 1.6%, and this comes in conjunction with the issuance of the demand index reading The subsidy for the week that ends on the seventh of this month, which may reflect an increase of 10 thousand requests to 213 thousand applications compared to 203 thousand requests in the previous weekly reading.

In another context, the markets are currently looking to the activities of the European Central Bank meeting, during which the monetary policy makers of the European Central Bank are expected to decide to maintain interest rates at their current zero levels and stabilize the marginal lending rate at 0.25% in addition to remaining on the interest rate on negative deposits -0.50% and proceed with the quantitative easing program at 20 billion euros per month, as long as necessary.

This comes before we witness later in the day the European Central Bank Governor Christine Lagarde’s press conference, which is her first press conference after she took over the post of former Governor Mario Draghi at the beginning of last month, in conjunction with the actual parliamentary elections in Britain which may be directly reflected On the UK exit file on the preset date, at the end of January.

Looking at the developments in the trade war between the world's two largest economies, we followed yesterday. US Senator Chuck Grassley said that his country will not activate customs tariffs adding 15% to Chinese goods valued at $ 156 billion by next Sunday, while White House trade advisor Peter Navarro noted that it is not He has any information regarding the non-imposition of these tariffs scheduled for December 15th, stating that there is nothing to make them fail to do.

Technical analysis

Gold price traded positively positive to confirm the breach of 1467.00 level, which turns the intraday path towards the rise, on its way to test 1489.00 level before trying to resume the corrective downtrend again.

Thus, we are more likely to witness further gains today, considering that exceeding the target level will lead the price to achieve more gains and restore the main bullish trend again, while breaking 1467.00 will stop the positive possibility and press the price to resume the bearish corrective path.

The expected trading range for today is between 1460.00 support and 1489.00 resistance.

Expected trend for today: bullish.