Gold analysis 09.01.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session amid the negative stability of the US dollar index according to the inverse relationship between them after the economic developments and data that were reported by the Chinese economy as the largest consumer of metals globally and on the cusp of developments and economic data expected today Thursday by the US economy which It includes members of the Federal Open Market Committee in the shadow of market pricing that the United States and Iran have backed away from expanding engagement in their conflict in the Middle East.

At exactly 03:59 AM GMT, gold price futures for February delivery rose 0.10% to trade at $ 1,559.30 per ounce compared to the opening at $ 1,557.70 per ounce, knowing that the contracts started the session’s trading on a falling price gap after yesterday’s trading was concluded At $ 1,560.20 an ounce, while the US dollar index fell 0.01% to 97.27 compared to the opening at 97.28.

We have followed on from the Chinese economy to disclose inflation data with the release of the annual reading of the consumer price index, which reflected the stability of growth at 4.5% during December, without expectations that indicated 4.7% growth, while the annual reading of the producer price index, which is an initial indicator Under inflationary pressures, deflation contracted to 0.5%, compared to 1.4% last November, contrary to expectations that the contraction will decrease to 0.4%.

On the other hand, investors are looking forward to the results of the speech of the Federal Reserve Member and Deputy Governor of the Federal Reserve, Richard Clarda, who will deliver a speech entitled "The American Economic Outlook and Monetary Policy" at the Council on Foreign Relations in New York, and this comes before we witness the release of the index of subsidy requests For the week ending January 4, which may reflect a decrease of 1 thousand requests to 221 thousand requests.

In the same context, the reading of the continuous benefit claims index for the week that ended on December 28 also showed a decline by 9 thousand applications to 1,719 thousand applications compared to 1,728 thousand applications, before we witnessed the dumping of another member of the Federal Committee, the governor of the Minneapolis Bank Federal Reserve Neil Kashari, opening speech at the Federal Reserve Regional Economic Conditions conference in Minneapolis.

To the talk of another member of the Federal Committee, New York Fed Governor John Williams, about targeting inflation at the Bank of England’s economic workshop in London, and that comes about a week after the minutes of the FOMC meeting held on December 10-11 December, by which he decided to keep interest rates at between 1.50% and 1.75% for the second meeting in a row.

Other than that, we followed at the weekend of the Chinese newspaper, the Global Times, that the timing of the trade agreement between Washington and Beijing is not important and that the actual content of the first phase of the agreement and how to implement it is the most important at the moment, and this came in conjunction with the report that touched on the fact that a Chinese trade delegation intends Traveling to the United States by next Monday to sign the first stage trade agreement next week.

We would like to point out, since the price of gold ended yesterday its longest daily gains march in more than three decades after it tested a $ 1,600 per ounce barrier for the first time in seven years, and is currently preparing to end its longest weekly gains march in six months with a decline during this week for the first time In six weeks, in the wake of reduced concerns about geopolitical tensions in the Middle East, especially the outbreak of war between America and Iran.

Technical analysis

The price of gold achieved a significant decrease yesterday to test the pivotal support 1556.70, as it remains above it until now, accompanied by the entry of the stochastic indicator to the oversold areas in the sale, while the EMA50 continues to provide positive support for the price.

Consequently, these factors encourage us to favor a bullish bounce to resume the main bullish trend, whose next main target is located at 1617.00, noting that breaking 1556.70 will stop the expected rise and press the price to head towards 1488.00 areas before any new positive attempt.

The expected trading range for today is between 1550.00 support and 1580.00 resistance.

Expected trend for today: bullish.