Gold analysis 03.02.2020

Gold price futures fell during the Asian session to witness their rebound from the top since January 8, while the highest contract experienced since March 22, 2013 amid the US dollar index rebound to the second session from its highest since 17 of this month according to the inverse relationship Between them after the People's Bank of China (the Central Bank of China) pumped liquidity to calm financial markets and on the cusp of developments and economic data expected on Monday by the US economy and in the shadow of the spread of the Corona virus.

At exactly 04:24 AM GMT, gold price futures for April delivery fell 0.78% to trade at $ 1,585.40 per ounce compared to the opening at $ 1,597.80 per ounce, knowing that the contracts started the trading session on an upward price gap after the week's trades ended At $ 1,587.90 an ounce, with the US dollar index rising 0.06% to 97.49 compared to the opening at 97.44.

On Sunday, the People's Bank of China announced that it intends to inject 1.2 trillion yuan ($ 173 billion) of liquidity into the market through repurchases in the open market (Repo). The Chinese Central Bank has stated that the total liquidity in the system will be more At 900 billion yuan ($ 130 billion) over the same period last year 2019.

We would like to point out, because some financial market analysts have commented on this matter, that although this will reflect the largest addition of liquidity in Chinese markets since 2004, it means merely injecting 150 billion yuan ($ 21.7 billion) in net liquidity today and that The People's Bank of China may pump more liquidity later this week by facilitating repo lending or medium-term lending to ease concerns in financial markets.

It is noteworthy that the World Health Organization announced last Thursday an international health emergency due to the rapid outbreak of the Corona virus, which requires more efforts to contain and combat that virus that started in Wuhan, China, which killed more than 361 people in China, in addition to the fact that there are 17,200 cases Infected with the deadly virus globally in the shadows of succession many countries have announced the emergence of infected cases.

On the other hand, investors are currently awaiting by the US economy, the largest economy in the world, to disclose the final reading of the PMI index by Markit for the United States of America, the largest industrial country in the world, which may reflect the stability of the expansion at a value of 51.7, with little change from the reading Preliminary for the month of January, and against a value of 52.4 last December.

This comes before we witness the disclosure of the Institute of Industrial Supply index reading, which may show contraction shrinkage to 48.5 compared to 47.2 in December, while the reading of the Institute of Industrial Supply measured in prices may expand to 52.0 compared to 51.7 in December, in conjunction with the release of the construction spending index, which reflects a slowdown in growth to 0.5% compared to a decline of 0.6% in November.

Technical analysis

Gold price opens trading today with a noticeable negativity to approach the pivotal support test 1575.90, as it is affected by the stochastic negativity, but it is still inside the bullish channel that appears in the picture, and gets good positive support from the EMA50, noting that the confirmed breach of the level of 1575.90 makes us likely Continue the bullish overall trend.

From here, we expect a bullish bounce to resume the bullish trend whose next target is located at 1611.20, noting that breaking 1575.90 then 1568.00 levels will stop the expected rise and press the price to return to the corrective correctional path again.

The expected trading range for today is between 1570.00 support and 1595.00 resistance.

Expected trend for today: It depends on the levels mentioned in the report.