Gold analysis 13.12.2019

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session to prepare for weekly gains amid the decline in the US dollar index, indicating stability near its lowest since the beginning of last July, according to the inverse relationship between them on the threshold of developments and economic data expected today Friday by the economy The US and the market pricing for the preliminary results of the British parliamentary elections and the report on Washington and Beijing reaching the first stage of the trade agreement.

At exactly 04:34 AM GMT, gold price futures for February delivery rose 0.05% to trade at $ 1,471.60 an ounce compared to the opening at $ 1,470.80 per ounce, knowing that the contracts started the session’s trading on a falling price gap after yesterday's trading was concluded At $ 1,472.30 an ounce, with the US dollar index down 0.02% to 96.79 compared to the opening at 96.81.

This is currently awaiting investors by the US economy to reveal a retail sales reading that represents about half of consumer spending, which represents more than two-thirds of the gross domestic product of the United States and that may reflect the acceleration of growth to 0.5% compared to 0.3% in October, as the reading may show Core to the same index, growth accelerated to 0.4%, compared to 0.2% in October.

This comes in conjunction with the release of the import price index, which may indicate a 0.2% increase compared to a 0.5% decline in October, while the annual reading of the same indicator may show a decline in the decline to 1.2% compared to 3.0% in the previous annual reading of October, And that is before we witness the disclosure of the business inventories reading, which may reflect 0.2% growth versus stability at zero levels last September.

It is noteworthy that during the meeting of the Federal Open Market Committee December 10-11, the Federal Reserve monetary policy makers kept short-term benchmark interest rates between 1.50% and 1.75% for the second meeting in a row, while revealing the expectations of the Federal Market Committee. Open to 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 the press conference held on Wednesday following the meeting’s activities that it is possible for the Federal Reserve to expand activities Purchase short-term treasury bills if necessary to increase liquidity in the banking system.

We would like to point out that the US Treasury Department launched a program to purchase Treasury bills in the amount of $ 60 billion per month in October. This program is expected to continue until the second half of 2020, which aims to provide liquidity after the interest in repo operations during September expanded to 10%. The Federal Reserve has paid for repo operations over the past two months, and these are the purchase of bonds and short-term debt from banks and hedge funds.

Otherwise, the preliminary results of the parliamentary elections in Britain have enhanced the chances of a decisive victory for British Prime Minister Royce Johnson that puts the United Kingdom on the right track to leave the European Union in the prescribed date by the end of January next year, and in another context, we followed yesterday the report that touched on the fact that U.S. President Donald Trump has signed the first stage of the U.S. trade deal with China.

On Thursday, US President Trump expressed through his official account on Twitter that America is very close to reaching a major trade agreement with China, and we would like to point out that the American trade negotiators yesterday presented to Trump the formula for the first phase of the trade agreement with China to Trump, which includes Beijing's commitment to expand the purchase of American agricultural products.

This came in conjunction with the report, which also touched on yesterday, because trade discussions between Washington and Beijing included reducing customs duties imposed on Chinese imports to the United States, and it is reported that signing the initial draft of the first stage of the trade agreement between the two parties may mean that Washington does not activate the additional tariffs of 15% on Chinese goods valued at $ 156 billion, which will go into effect next Sunday.

Technical analysis

Gold price trading stabilized around the EMA50 after the strong decline witnessed yesterday evening, to indicate the return of the price to the resumption of the corrective downtrend after approaching by a few points difference from our expected target at 1489.00, waiting to break the support of the ascending sub channel at 1458.00 to obtain a strong negative incentive It supports chances of achieving our awaited targets that start at 1447.00 and extend to 1413.10.

Consequently, we are likely to witness further declines in the upcoming sessions unless the price rushes to breach the 1489.00 level and hold above it.

The expected trading range for today is between 1450.00 support and 1480.00 resistance.

Expected trend for today: bearish.