Gold analysis 02.03.2020

Gold futures rose during the Asian session to witness their bounce for the second session from the lowest since February 7, with the dollar index rebounding for the sixth session in eight sessions from the highest since April 21, 2014, explaining the lowest since the fourth of this month according to the relationship The opposite between them following the economic developments and data that were followed by the Chinese economy, the largest consumer of metals globally, on the cusp of developments and economic data expected on Monday by the US economy and amid hopes of a global stimulus to reduce the economic damage to Corona.

At exactly 04:54 AM GMT, gold price futures for April delivery rose 0.62% to trade at $ 1,602.60 per ounce compared to the opening at $ 1,592.80 per ounce, knowing that the contracts started the trading session on an upward price gap after the week's trades ended And last month at $ 1,566.70 an ounce, with the US dollar index down 0.09% to 97.90 compared to the opening at 97.99.

We followed Saturday, the China Federation of Logistics and Procurement (CFLP) revealed the readings of the Industrial and Service Purchasing Managers' Index, which reported their worst performance ever with the industrial sector contracting to 35.7 compared to a expansion of 50.0 in the previous reading last January, worse than expectations that It pointed to a contraction at 45.1, and the service sector contracted to 29.6 versus a widening at 54.1, also worse than expectations for a widening at 51.4.

On the other hand, investors are currently awaiting by the US economy the disclosure of the final reading of the manufacturing PMI by Markit on the United States, which may reflect the stability of the expansion at a value of 50.8, little changed from the initial reading for the past month and compared to 51.9 last December And, before we see the release of the construction spending index, which shows a 0.6% increase compared to a 0.2% decrease last November.

This comes in conjunction with the disclosure also by the largest economy in the world and the largest industrialized country in the world about the reading of the Institute of Industrial Supply index, which may show a shrinkage of breadth to a value of 50.5 compared to 50.9 in December, as may read the reading of the Institute of Industrial Supply measured in prices Capacity widened to 51.2 from 53.3 in December.

It is reported that gold futures contracts witnessed Friday their worst daily performance since June 20, 2013 and their worst weekly performance since the beginning of November 2016, as they reflected their first monthly losses in three months with the transmission of bleeding of global stock indices for gold contracts. Where some of the report mentioned that investors sold gold to cover their positions in global stocks, which last week lost more than $ 5 trillion of its market value.

The markets are looking for the adoption of monetary policy makers with global central banks stimulus policies to overcome the negative economic effects of Corona, especially after the Chinese industrial and service sector data, which is the worst ever, and amid the aspiration to reveal industrial sector data for the economies of the euro area, the United States, Britain and Canada at a time Later today to assess whether the industrial sector has been affected globally, or is it confined to China so far?

In the same context, it is expected that the monetary policy makers at the Reserve Bank of Australia will resume reducing the short-term benchmark interest rates during the current year and reduce them by 25 basis points to 0.50% at tomorrow's meeting Tuesday after fixing them in the previous three meetings and after reducing them three times by 25 basis points last year, its lowest level ever at 0.75%.

The markets are also pricing in the Federal Reserve’s resumption of the interest rate on federal funds during this year and reducing them by 50 basis points to between 1.00% and 1.25% at the meeting of March 18-18, and after reducing them three times by 25 basis points a year The past to 1.50% and 1.75%, with an eye also to the Federal Open Market Committee revealing its expectations for the future of interest rates, growth, inflation and unemployment for the next three years.

Bank of Japan Governor Harikiko Kuroda noted a little while ago that the Bank of Japan will take the necessary steps to stabilize the financial markets, which contributed in a way to allaying the anxiety of investors, otherwise, given the developments of the Corona virus that started in Wuhan, China, the deadly virus has killed So far, nearly 3,000 people have died and at least 85,000 cases have been confirmed worldwide.

Technical analysis

The sharp drop in the price of gold stopped at the 50% Fibonacci retracement level for the measured rise from 1453.11 to 1689.33, and starts today with a noticeable bullish trend to return to the bullish sub-channel that appears in the image, which provides signs of the price's return to resume the main bullish path, especially as the stochastic indicator provides Positive signs Now we expect the price to stimulate further gains in the upcoming sessions.

Therefore, the bullish trend will be expected for today, and targets begin to breach the 1633.58 level to open the way for the recent visit to the summit recorded at 1689.33 as a next positive target, noting that breaking 1571.22 will put the price under additional negative pressure that threatens to support the main upside channel and opens the door for a downward shift on Short and medium term.

The expected trading range for today is between 1580.00 support and 1635.00 resistance.

Expected trend for today: bullish.