Gold analysis 28.02.2020

Gold price futures fluctuated in a narrow range tilted toward decline during the American session to witness its bounce back for the third session in five sessions from its highest since January 23, 2013 amid the US dollar index rebound to the second session from the lowest since the sixth of February The inverse relationship between them is on the cusp of developments and economic data expected on Friday by the US economy and amid market assessments of the spread of the Corona virus outside China and the possibility of it turning into a global pandemic.

At exactly 04:15 am GMT, gold price futures for April delivery fell 0.33% to trade at $ 1,640.70 per ounce compared to the opening at $ 1,646.10 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday's trading was concluded At $ 1,642.50 an ounce, with the US dollar index rising 0.08% to 98.50 compared to the opening at 98.42.

Investors are awaiting by the American economy, the largest economy in the world, the reading of the merchandise trade balance index, which may explain the widening of the deficit to $ 68.5 billion compared to $ 68.3 billion last December, in conjunction with the release of the initial reading of the wholesale inventory index, which may It reflects a 0.1% rise versus a 0.1% decline in December.

This comes in conjunction with the disclosure of spending and personal income data, which may reflect the stability of personal spending growth at 0.3%, little changed from the previous reading in December, and personal income growth accelerated to 0.3% compared to 0.2% in December, while it may A reading of the core personal consumption expenditures index shows the stability of the pace of growth in January at 0.2%.

Markets are also looking to the largest industrialized country in the world to reveal industrial sector data with the release of the Chicago PMI reading, which may reflect a contraction contraction to 46.1 compared to 42.9 last January, to reveal the final reading of the Michigan University Index of Consumer Confidence Which may show the breadth shrinkage to 100.7 compared to 100.9 in the first preliminary reading of the current month and 99.8 in January.

On the other hand, South Korea has just announced the increase in the number of cases infected with the Corona virus to more than 2,000 cases and Italy has announced more than 600 cases, while Japan closed its schools, in conjunction with the examination of the state of California, USA, about 8,400 people for signs of the virus after They recently traveled to Asia, while Saudi Arabia suspended religious visits that attract millions to them.

We would like to point out that the Director-General of the World Health Organization, Tidros Adhanum Gebresus, noted on Thursday that the spread of the Corona virus outside China has become a greater source of concern for the organization about the spread of the disease inside the Chinese borders, pointing out that for the second day in a row new cases of coronavirus were registered outside China in numbers The largest number of infected cases reported in China.

The Director-General of the World Health Organization, Gebrissos, also stated that the organization announced in the last twenty-four hours about 7 new countries that recorded the first cases of HIV infection, bringing the total number of countries that announced the emergence of cases to about 44 countries, bringing the total cases of coronavirus outside China has nearly 3,500 cases, and more than 55 people have died.

It is reported that Gebresus expressed at the weekend that the outbreak of the Corona virus can still be contained and that the virus is not out of control, especially with the death toll not significantly increasing, explaining that it is too early to describe its spread as a global epidemic, stressing that it is inappropriate to use this description Currently, it should focus on efforts to contain it, despite the possibility of it turning into a serious pandemic.

Technical analysis

Gold is facing a strong resistance at 1655.90 and has difficulty breaking it, to start testing the pivotal support level 1635.20 again, and by looking carefully at the chart, we find that the price draws a double top pattern that may force the price to incur some losses during the upcoming sessions.

Therefore, we prefer to pause on neutral temporarily until we get a clearer signal for the next direction, which we will get by breaking the support 1635.20 or breaking through the resistance 1655.90, while noting that breaking this level will press the price to visit the 1601.70 level directly, while penetrating the resistance The price will lead to resume the main bullish trend that its next target is located at 1720.00.

The expected trading range for today is between 1625.00 support and 1660.00 resistance.

Expected trend for today: neutral.