Gold analysis 16.01.2020

Gold price futures fluctuated in a narrow range tilted toward decline during the Asian session to witness its bounce back for the fifth session in six sessions from the top since March 22, 2013 amid the US dollar index rebounding to the eighth session in thirteen sessions from the lowest since the beginning of July According to the inverse relationship between them on the threshold of the expected economic developments and data today by the US economy and following the signing of US President Donald Trump and Chinese Vice Premier Liu He on the first stage of the trade deal in the White House.

At exactly 03:59 AM GMT, gold price futures for February delivery fell 0.01% to trade at $ 1,556.40 per ounce compared to the opening at $ 1,556.60 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded yesterday's trading At $ 1,554.00 an ounce, with the US dollar index rising 0.01% to 97.20 compared to the opening at 97.19.

Investors are currently awaiting by the US economy the disclosure of retail sales reading, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product of the United States, which may reflect accelerated growth to 0.3% compared to 0.2% last November, as may appear Core reading of the same index, growth accelerated to 0.5%, compared to 0.1% in November.

This comes in conjunction with the disclosure of the Philadelphia Industrial Index reading by the largest economy in the world and the largest industrialized country globally, which may reflect a widening of what amounted to 3.7 compared to 0.3 last December, and with the release of the import price index, which may explain the acceleration of growth to 0.3 % Compared to 0.3% in November, while the annual reading of the same index may show a 0.5% increase compared to a decline of 1.3% in the previous annual reading for the month of November.

This also comes in conjunction with the issuance of the aid claims index for the week that elapses on January 11th of this year, which may reflect an increase of 3 thousand requests to 220 thousand requests compared to 214 thousand requests in the previous weekly reading, in conjunction with the disclosure of the inventory reading Businesses, which may reflect a 0.1% decline compared to a 0.1% growth last October.

Up to the disclosure of the US housing market data with the release of the housing index reading by the National Association of Home Builders, which may reflect a decline to $ 74 compared to 76 in December, in conjunction with the speech of a member of the Federal Open Market Committee and Deputy Governor of the Federal Reserve Michael Bowman on the housing projections at the Kansas City Home Building Association at Breakfast Economic Outlook.

Other than that, both President Trump and the Chinese Vice-Premier hailed the cooperation between the two countries and the flexibility in the negotiations that contributed to ending the virtue of the trade dispute between them which lasted for about a year and a half, and the American President expressed the fact that Beijing is helping Washington in resolving a number of issues It is reported that the two parties will complete negotiations regarding the second stage of the trade agreement, which may be reached after the upcoming major US elections.

In the same context, US Treasury Secretary Stephen Mnuchen yesterday expressed that the second stage of the trade agreement will witness the abolition of more tariffs, while stating that the first stage of the trade agreement has a comprehensive and enforceable mechanism and that China has agreed to develop laws to fulfill its obligations, adding that Some outstanding issues, including technology and cybersecurity, will be worked on in the second phase of the trade agreement.

Mnuchin also noted that the Huawei crisis is not an obstacle with regard to relations between the United States and China, and this came hours after the report that touched on the fact that the American administration is drafting rules to prevent more Huawei Chinese sales, which highlighted the continuing tensions between Washington and Beijing in particular. That the US tariffs on Chinese goods at about $ 360 billion still remain after the main elections that until the completion of the second phase of the agreement.

Technical analysis

The gold price continues around 1556.70, noting that the stochastic is providing negative signals that support the chances of resuming the downside corrective trend, which targets 1519.00 mainly.

Therefore, we will maintain our expectations for the downside direction for the upcoming period, noting that a breakout of 1556.70 and holding above it will stop the suggested decline and lead the price to resume the main bullish trend whose first target is located at 1611.00.

The expected trading range for today is between 1530.00 support and 1565.00 resistance.

Expected trend for today: bearish.