Gold analysis 17.02.2020

Gold price futures fluctuated in a narrow range that tilted back down during the Asian session to witness its bounce for the second session from its highest since February 3, when it tested its highest since January 8, which is the highest in seven years amid the low dollar index The American made it clear that he had attended the second session from above, since October 8, according to the inverse relationship between them.

This follows economic developments and data that were announced by the Japanese economy, the second largest economy in Asia and the third largest in the world, and amid the scarcity of economic data today by the American economy due to the Presidents Day holiday in the United States and in the shadow of investors ’weight of the spread of the Corona virus in exchange for expectations to support monetary policy from Before the global central banks.

At exactly 04:04 AM GMT, gold price futures for April delivery decreased 0.13% to trade at $ 1,585.30 per ounce compared to the opening at $ 1,585.10 per ounce, knowing that the contracts started the trading session on a falling price gap after the week's trades ended The past at $ 1,586.80 an ounce, with the US dollar index down 0.01% to 99.11 compared to the opening at 99.12.

We have followed, on the Japanese economy, the disclosure of the seasonally adjusted preliminary reading of GDP, which showed a contraction of 1.6% compared to 0.4% growth in the third quarter, worse than the expectations that indicated a contraction of 1.0%, while the seasonally adjusted preliminary annual reading of the same index measured by prices showed an acceleration Growth to 1.3% vs. 0.6%, outperforming expectations at 1.1%.

Otherwise, investors are currently looking for by the third largest economy in the world and the third largest industrialized country globally after both the United States and China, the disclosure of industrial sector data with the release of the final reading of industrial production, which may reflect the stability of the expansion at 1.3% without any change from the initial reading Previous month in December, compared to a decline of 1.0% last November.

On the other hand, we followed on Sunday, Chinese Finance Minister Liu Kun expressed that he expects to reduce his country's financial revenues and increase expenditures in the future, which strengthened speculation that Beijing will adopt more financial incentives as part of efforts to contain the repercussions of the spread of the Corona virus, which has infected more than Seventy thousand people and killed more than one thousand seven hundred others worldwide.

In the same vein, China also revealed over the weekend plans to reduce corporate taxes and fees in addition to allowing banks to run more non-performing loans, just before we saw the People's Bank of China (the Chinese Central Bank) cut interest on so-called lending facilities The future average, and this came amid expectations that the Chinese central bank will intensify liquidity easing and financing conditions in Chinese financial markets.

We would like to point out that, according to Bloomberg Economist’s estimates, the Chinese economy, the largest in Asia and the second largest in the world, was operating between 40% to 50% only last week. It is reported that the Chinese province of Hubei today announced 2,000 new cases of coronavirus and 100 deaths. Additional case, knowing that another death was reported last weekend in both Taiwan and France.

Technical analysis

The price of gold ended last week's trading above the level of 1575.90, confirming the breach of this level and opening the way for heading towards a visit to the previously recorded summit at 1611.20 as the next positive station.

Thus, the bullish trend scenario will remain effective for the upcoming period supported by the EMA50, noting that breaking 1575.90 and holding below it may pressure the price to visit 1554.10 areas again before any new attempt to rise.

The expected trading range for today is between 1570.00 support and 1600.00 resistance.