Gold analysis 29.01.2020

Gold price futures fluctuated in a narrow range that tilted back down during the Asian session to witness its bounce for the third consecutive session from its highest since January 8, when it tested its highest since March 18, 2013 amid the rise of the US dollar index according to the inverse relationship Between them are on the threshold of the expected economic developments and data on Wednesday by the US economy, which includes the decisions and trends of monetary policy makers at the Federal Reserve and the press conference of the Federal Reserve Governor Jerome Powell in Washington.

At exactly 04:20 AM GMT, gold price futures for February delivery fell 0.11% to trade at $ 1,570.20 per ounce compared to the opening at $ 1,572.00 per ounce, knowing that the contracts started the session’s trading on a falling price gap after it concluded yesterday's trading At $ 1,575.80 an ounce, with the US dollar index rising 0.09% to 98.03 compared to the opening at 97.95.

Investors are currently awaiting the release of the December data by the US economy with the release of the merchandise trade balance reading, which may explain the widening deficit to $ 64.5 billion compared to $ 63.2 billion in conjunction with the release of the initial reading of the wholesale inventories index, which may reflect a 0.1% rise against 0.1% decline, to reveal housing market data with the release of existing home sales, which may show a slowdown in growth to 0.5% versus 1.2%.

This comes in conjunction with the FOMC meeting, on January 28-29, during which it is expected that the short-term benchmark interest rates for the third consecutive meeting will be maintained between 1.50% and 1.75%, and look forward to the press conference’s activities. To be held by Powell Fed Governor half an hour after the FOMC meeting’s activities expire.

We would like to point out that US President Donald Trump renewed his demand for the Federal Reserve to resume reducing interest on federal funds during its current meeting, in order to maintain interest rates in America compared to other countries, with his statement that if the Federal Reserve decides to reduce reference interest rates Short-term, his country will focus on paying its debts and refinancing again.

Otherwise, we followed yesterday, Chinese President Xi Jinping, after meeting with WHO Director Tidros Adhanum to discuss how to contain the Corona virus and prevent it from becoming a global epidemic, expressed his country’s ability to combat the spread of the virus, and that China trusts and is able to win this The battle, amid his statement that the most important measure is how to prevent and combat it, which will cause the organization and the international community to provide a calm and objective evaluation of the virus.

In the same context, the Director-General of the World Health Organization, Adhanom, in turn, expressed yesterday the organization's confidence in the ability of China to contain the spread of the Corona virus and that the organization encourages everyone to remain calm in the current circumstances and that there is no need for exaggerated reactions or the evacuation of foreign citizens from China, with It informed him that the Chinese government had approved measures to curb the spread of the virus, and thanked the Chinese government for its efforts to prevent its spread.

Technical analysis

The price of gold ended yesterday's trading below 1575.90, which puts the price under expected negative pressure over the intraday basis, on its way to mainly test 1554.10 level, noting that we will be waiting for an upside bounce to resume the main bullish trend after testing the mentioned level.

From here, a bearish bias will be likely for today, noting that breaching the target level will extend the descending wave to reach 1536.50 next station, while a break of 1575.90 represents the key to stop the current negative pressure and the price rush to restore the upside again.

The expected trading range for today is between 1554.00 support and 1575.00 resistance.

Expected trend for today: bearish temporarily.