Gold analysis 15.01.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce for the second session from the lowest since January 3 this year amid the US dollar index rebound for the second session in four sessions from the highest since 26 of last December According to the inverse relationship between them on the cusp of developments and economic data expected on Wednesday by the US economy, the largest economy in the world, and looking forward to the signing of both China and the United States on the first stage of the trade deal in Washington.

At exactly 04:09 AM GMT, gold price futures for February delivery rose 0.37% to trade at $ 1,552.60 per ounce compared to the opening at $ 1,546.80 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded yesterday's trading At $ 1,544.60 an ounce, with the US dollar index down 0.02% to 97.36 compared to the opening at 97.38.

Investors are awaiting by the US economy the disclosure of the PPI reading, which is an initial inflation indicator that may reflect 0.2% growth versus stability at zero levels in November, while the core reading of the same indicator may show 0.2% growth versus 0.2% contraction, This coincided with the disclosure of industrial sector data with the release of the New York Industrial Index reading, which may reflect a widening of 3.7 to 3.5 in December.

This comes before we witness the talk of members of the Federal Open Market Committee, President of the Federal Reserve Bank of Patrick Harker about the normalization of monetary policy at the official forum of monetary and financial institutions in New York, and President of the Dallas Federal Reserve Bank Robert Kaplan at the Economic Club in New York, before the disclosure of The Big Book report, which is important in being published two weeks before the FOMC meeting.

Otherwise, we followed yesterday, Reuters news agency reported that the US administration is drafting rules to prevent more Chinese Huawei sales, which highlighted the continuing tensions between Washington and Beijing in conjunction with expectations that the US tariffs on Chinese goods is estimated at 360 $ 1 billion will remain in place until after the major US elections, according to Bloomberg News recently.

It is reported that Chinese Vice Premier and Chairman of the Chinese negotiating team, Liu Hei, arrived in Washington earlier this week on a visit during which the largest economists in the world will sign the first stage of the trade deal, specifically in the White House. In the same context, the American commercial representative noted Robert Lighthizer also said Monday that the Chinese translation of the text of the deal had been completed, with his expression, "We will announce it Wednesday before signing."

We would like to point out, because the US Treasury Department last Monday removed China from the currency manipulation list after it was put on the list by the ministry last August with the postponement of that matter because Beijing remained artificially weaker on the yuan, and the ministry’s semi-annual report touched To the currency that China has made "enforceable obligations" to spread exchange rate information and not to depreciate the yuan.

It is noteworthy that gold futures contracts last week ended their longest weekly gains march in six months with a decline during the previous week for the first time in six weeks, after last Wednesday ended the 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, in the wake of reduced concerns about geopolitical tensions in the Middle East, especially the outbreak of war between the United States and Iran.

Technical analysis

The price of gold provides more positive trading to test the pivotal resistance 1556.70, accompanied by the stochastic loss of positive momentum and its entering overbought areas, to form a negative factor that we expect to support the chances of the price rebound to resume the bearish corrective trend, whose next target is located at 1519.00.

Therefore, we will maintain our expectations for the downside for today, noting that breaching 1556.70 and holding above it will stop the expected decline and lead the price to restore the main bullish direction again.

The expected trading range for today is between 1530.00 support and 1560.00 resistance.

Expected trend for today: bearish.