Gold analysis 12.02.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session to witness the resumption of its rebound from the lowest since January 22 for the fifth session in six sessions amid the rebound of the US dollar index for the second consecutive session from the highest since October 10 / October, according to the inverse relationship between them on the cusp of developments and economic data expected today Wednesday by the US economy, which includes the activities of the second half of the semi-annual testimony of Federal Reserve Governor Jerome Powell in front of Congress.

At exactly 03:55 AM GMT, gold price futures for April delivery rose 0.01% to trade at $ 1,571.30 per ounce compared to the opening at $ 1,571.20 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday's trading was concluded At $ 1,570.10 per ounce, with the US dollar index down 0.03% to 98.75 compared to the opening at 98.78.

Investors are currently looking for what will be revealed by the speech of Federal Open Market Committee member and Chairman of the Federal Reserve Bank Patrick Harker about the economic outlook in the state of Pennsylvania, before we witness the activities of the second half of the Federal Reserve Governor Jerome Powell's statement regarding monetary policy before the committee Banking in the Senate.

This comes hours after the Federal Reserve Governor Powell delivered on Tuesday the first half of his semi-annual testimony about monetary policy before the Financial Services Committee in the House of Representatives, through which he expressed the fact that the current monetary policy of the Federal Reserve is appropriate and that inflation is expected to rise to the goal of the Federal Market Committee Open at two percent in the next few months with his statement that core inflation is at 1.6 percent.

Powell also noted yesterday that the Federal Reserve began facilitating monetary policy to support the economy since the second half of last year, and that the current monetary policy supports growth and contributed to improving conditions in the labor market in addition to supporting the growth of inflationary pressures towards the goal of the Federal Committee, adding that the Federal Reserve places in Considering that reducing interest on federal funds more broadly limits its ability to act at the time of an economic recession.

Powell reiterated, within his testimony before Congress, his expectations that the Federal Committee would go ahead in purchasing bonds during the second quarter of this year and that the repo rate will remain active in the markets until next April at the very least, and we would like to point out that many market analysts believe that the reserve operations The Federal Reserve is a form of quantitative easing that is left untouched, while the Federal Reserve refuses to call a quantitative easing on what it does.

In another context, Powell mentioned the Corona virus, where he asked whether the effect of the deadly virus on China and the United States is temporary or permanent, explaining that it is too early to talk about the impact of the spread of coronavirus on his country's economy, adding that the Federal Reserve will closely monitor developments Related to the virus that may affect global supply chains, including the United States of America.

It is reported that US President Donald Trump tweeted yesterday on his official account on Twitter during Powell's testimony before Congress, "The interest on federal funds is very high and the US dollar is putting pressure on exports". Otherwise, investors are now looking by the US economy for the Treasury to reveal the Federal Budget reading That could reflect the deficit shrinking to $ 10.7 billion, compared to $ 13.3 billion last December.

On the other hand, we followed yesterday, Chinese President Xi Jinping expressed his belief that his country won the battle of the Corona Virus, adding that China will achieve all of its economic and social goals that it had previously set and that it will become more prosperous after winning the battle, with his statement that there are clear positive results regarding Attempts to contain the dangerous virus that killed more than a thousand people, mostly in the Chinese city of Wuhan, which is the epicenter of the spread of coronavirus.

Technical analysis

Gold price provided negative trading yesterday, but it is due to fluctuation around the EMA50, to keep the upside scenario active and effective for the coming period, which aims to breach the 1575.90 level to rush towards 1611.20 which represents our next main station, while recalling that the continuation of the upside wave requires stability above 1554.10, where A breach of this level will pressure the price to make more bearish correction in the intraday basis.

The expected trading range for today is between 1555.00 support and 1590.00 resistance.

Expected trend for today: bullish.