Gold analysis 19.02.2020

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 January 8, when it tested the highest for it since March 22, 2017 amid the rise in the US dollar index, indicating its stability near From above, since the beginning of October, when he tested the highest for him since May 12, 2017, according to the inverse relationship between them.

This comes on the cusp of developments and economic data expected today Wednesday by the US economy, the largest economy in the world, which includes the talk of members of the Federal Open Market Committee and the Federal Reserve revealed the minutes of the meeting of the Federal Open Market Committee and in the shadow of investors' assessment of the developments of the spread of the Corona virus amid the Chinese government’s emphasis on Slowing the frequency of coronavirus infection.

At exactly 04:28 AM GMT, gold price futures for April delivery rose 0.02% to trade at $ 1,604.50 per ounce compared to the opening at $ 1,604.80 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday's trading was concluded At $ 1,603.60 an ounce, with the US dollar index rising 0.01% to 99.44 compared to the opening at 99.43.

Investors are currently awaiting by the US economy the disclosure of the Producer Price Index reading, which is an initial indicator of inflation, which may reflect the stability of growth at 0.1% versus during December, while the fundamental reading of the same indicator may show acceleration of growth to 0.2% against 0.1%, This coincided with the talk of Federal Committee member and President of the Cleveland Bank of the Federal Reserve Loretta Mester at the Executive Women’s Forum in Philadelphia.

This also comes in conjunction with the disclosure of housing market data, with the release of both the beginning construction index and the building permit index, and amid expectations that the reading of the building permits index will reflect a 2.1% increase to about 1,450 thousand permits compared to a decline of 3.9% at 1,416 thousand permits in December / December, while the reading of the index of start-up homes, may reflect a decline of 12.0% to about 1,415 thousand homes compared to a rise of 16.9% at 1,608 thousand homes.

This comes before we witness the talk of two other members of the Federal Committee, President of the Minneapolis Federal Reserve Bank Neil Kashkari at the twelfth annual symposium on agriculture in the state of Minnesota, before Federal Reserve Vice President Dallas Kaplan delivered a speech entitled "Presented by the Federal Reserve "At the Urban Land Institute of North Texas in Dallas.

Reaching the upcoming event today, the Federal Reserve revealed the minutes of the Federal Open Market Committee meeting held on January 28-29, in which the Federal Reserve monetary policy makers decided to keep interest rates on federal funds at between 1.50% And 1.75% for the third consecutive meeting at the time.

It is noteworthy that the Federal Reserve Governor Jerome Powell expressed during the press conference held after the meeting of the Federal Committee at the time, that the decisions of the committee depend on the economic data received, while touching that if inflation rates remain below the target of the Federal Reserve, this may lead to a reduction Expectations of inflation and thus reduce short-term interest rates, adding that inflation is expected to reach the target within the next three months.

Powell also noted at the time that the Federal Reserve is seeking to avoid the stability of inflation below the target of two percent, with his statement that there will be slight adjustments to the reserve reserve mandatory and that the general budget will continue to expand over time, adding that the Federal Reserve expects support from repurchases during April / This April, with the indication that it is regrettable that the Coruna virus is spreading and that it is expected to have a negative impact on the Chinese economy.

Powell also touched on the fact that the Federal Reserve is closely monitoring the situation regarding the spread of the Corona virus and its impact on the economy, while stating that there are some cautious optimism about the global economy, pointing out that the financial conditions are improving and trade tensions have declined, indicating that his country signed with China for the first stage of the trade agreement. This is in addition to the decrease in the chances of Britain leaving without an agreement from the European Union, which contributes to supporting the positive expectations.

On the other hand, the National Health Commission of China has just announced 1,749 new confirmed cases of Corona virus, down from 1,886 cases announced yesterday, which showed the lowest rate of new coronavirus infections in China since January 29. January, while the death toll from the deadly virus, which has already spread to more than 24 other countries, has risen to more than 2,000.

It is noteworthy that the People's Bank of China (the Chinese Central Bank) last Monday reduced the average term interest rate by ten basis points to 3.15% from 3.25%, which paves the way for the Chinese central bank to cut key interest rates tomorrow, Thursday, amid expectations of intensifying monetary policy makers at the People's Bank of China. Measures to reduce liquidity and financing conditions in the face of financial pressures on the largest economies of Asia and the second largest economy in the world due to the spread of Corona

Technical analysis

Gold price trades around the 1600.00 level after yesterday's bullish rally, and the price needs to surpass the resistance of the bullish intraday channel that appears in the picture to confirm the continuation of achieving gains in the intraday and short term, where our next main target is located at 1611.20, whose breach represents the key to the trend towards 1625.00 as a station deification.

SMA 50 continues to support the suggested bullish wave, noting that a break of 1575.90 will stop the expected rise and put pressure on the price to return to the corrective downside path again.

The expected trading range for today is between 1585.00 support and 1620.00 resistance.

Expected trend for today: bullish.