Gold analysis 17.01.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce for the second session in four sessions from the lowest since the third of this month, condoning the US dollar index bounce for the second consecutive session from the lowest since the eighth of this month according to the reverse relationship Between them, following the economic developments and data that were reported on the Chinese economy by the largest consumer of metals globally and on the cusp of developments and economic data expected on Friday by the US economy, the largest economy in the world.

At exactly 04:21 am GMT, the gold futures contracts for February delivery rose 0.14% to trade at $ 1,555.10 per ounce compared to the opening at $ 1,553.00 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded yesterday's trading At $ 1,550.50 an ounce, while the US dollar index rose 0.05% to 97.34 compared to the opening at 97.30.

We have followed the National Bureau of Statistics revealed to China the seasonally adjusted reading of the fourth quarter GDP, which showed stable growth at 1.5%, little changed from the previous reading for the third quarter, surpassing expectations that indicated a slowdown in growth to 1.4%, as indicated by the annual reading of the index The same growth stability at 6.0% also, little changed from the previous annual reading for the third quarter, and thus the current reading is in line with the expectations that indicated this.

In the same context, the office also revealed the annual reading of the retail sales index, which showed stable growth at 8.0%, unchanged from the previous annual reading last November, surpassing expectations that indicated a slowdown in growth to 7.9%, while the annual reading of production showed Industrial growth accelerated to 6.9% versus 6.2%, contrary to expectations at 5.9%, and the reading of unemployment rates showed an increase to 5.2% compared to 5.1% in November.

Other than that, we followed Chinese President Xi Jinping, in a message sent to his US counterpart, President Donald Trump after the world's two largest economies signed the first stage of the trade agreement, that the agreement reflects that the two parties can resolve differences through talks and dialogue, explaining that he hopes that Washington operates Chinese companies fairly and equitably, adding that the two sides must adhere to the terms of the agreement to achieve greater progress in joint cooperation between the two countries.

We also followed up yesterday the report that touched on the fact that Chinese Vice-Premier Liu He noted that the trade agreement between his country and America will not affect the interests of other parties and that China's imports of American agricultural products are based on market principles, explaining that Chinese companies will import American agricultural commodities according to To the needs of the Chinese consumer, demand and supply in the market, adding that it is not wise to start the second stage negotiations immediately.

In contrast, US Vice President Mike Pence said that negotiations for the second phase of the trade agreement between Washington and Beijing have already started, and it is reported that US President Trump noted during the signing of the trade agreement with China that his administration would leave the customs duties imposed on Chinese goods even after the signing of the first phase of the agreement And that the customs duties on Chinese goods will be abolished completely after signing the second stage of the agreement.

The terms of the first stage of the trade agreement between Washington and Beijing included that China increase the volume of its purchases of American goods and services by $ 200 billion depending on the exports of the United States to China in 2017, including $ 52.4 billion in energy exports, $ 77.7 billion of Manufacturing goods and $ 37.9 billion in services in addition to $ 32 billion in agricultural commodities, amid the US pledge to provide markets with high-quality goods and services and to eliminate some tariffs imposed on Chinese goods.

Also, according to the agreement, the two parties commit to protecting intellectual property on a fair and effective basis, and that the two parties will work to open markets for each of the services in a fair and equal manner, amid the parties ’commitment not to interfere in the currency exchange rate for any reasons related to competitive purposes, and that transparency must be adhered to, which ensures that China accepts Announcing its foreign exchange reserves and quarterly imports of goods and services.

The agreement also includes the abolition of American tariffs on some Chinese technology goods and the reduction of American tariffs on other Chinese goods and goods by $ 120 billion to 7.5%, while American tariffs will remain 25% on a group of Chinese industrial products and components valued at $ 250 billion, Amid the Chinese tariffs on American goods and merchandise, exceeding $ 100 billion, until the two sides adopt the second stage of the agreement.

It is noteworthy that US Treasury Secretary Stephen Mnuchen said on Wednesday that the second stage of the trade agreement will witness the abolition of more tariffs, while stating that the first stage has a comprehensive and implementable mechanism and that China agreed to put laws to fulfill its obligations, expressing that some outstanding issues including technology and security The cyber will be worked on in the second stage, adding that Huawei's crisis is not an obstacle in the relationship between the United States and China.

On the other hand, investors are currently awaiting the release of housing market data by the US economy, with the release of each of the start-up homes and the building permit, and amid expectations that building permits will decline by 3.8% to about 1,405 thousand permits, compared to a 5.0% increase at 1,461 thousand permits in November. November, while start-up homes may reflect an increase of 2.0% to 1,340,000 homes compared to a rise of 3.8% at 1,314,000 homes.

This comes before we witness the speech of a member of the Federal Open Market Committee and Chairman of the Federal Reserve Bank of Philadelphia Patrick Harker about the economic expectations at the Economic Leadership Forum for New Jersey bankers, before the disclosure of industrial sector data for the largest industrial country in the world with the release of the industrial production index, which may reflect stability It is at zero levels, against a 0.1% rise in November.

In the same vein, the reading of the energy utilization index may show a decrease to 77.0% compared to 77.3% in November, leading to the disclosure of the preliminary reading of the University of Michigan index of consumer confidence for January, which may show stability of expansion at a value of 99.3 below Little change from what it was in the previous reading of December.

This comes in conjunction with the release of the employment opportunities and job turnover reading, which may reflect a decrease to 7.24 million compared to 7.27 million last October, before we witnessed another member of the Federal Committee, Deputy Governor of the Federal Reserve, Randall Quarles, about banking supervision. At the annual meeting of the Banking Law Commission of the American Bar Association in Washington.

Technical analysis

The gold price did not show any strong movement yesterday, to continue to fluctuate around 1556.70, maintaining its stability below it, and therefore, our expectations for the downside will remain unchanged for the next period, which mainly targets 1536.50 and 1519.00 levels, while achieving it requires stability without Level 1556.70.

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

Expected trend for today: bearish.