Gold analysis 06.03.2020

Gold price futures fluctuated in a narrow range that tilted back down during the Asian session to witness its rebound from its highest since February 24, when it tested its highest since January 23, 2013 amid the dollar index rebound to the ninth session in twelve sessions from the top It has been since April 21, 2017, explaining the lowest since January 2, according to the inverse relationship between them following the speech of the members of the Federal Committee and on the threshold of the expected economic data today by the American economy, which includes the speech of another member of the Federal Committee.

At exactly 04:06 AM GMT, gold price futures for April delivery decreased 0.20% to trade at $ 1,669.80 per ounce compared to the opening at $ 1,673.10 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday's trading was concluded At $ 1,668.00 an ounce, while the US dollar index fell 0.06% to 96.56 compared to the opening at 96.62.

We have just followed the talk of members of the Federal Open Market Committee, President of the Federal Reserve Bank of Minneapolis Neil Kashkari, who participated in a panel discussion at the University of Minnesota in St. Paul, and the talk of New York Federal Reserve Chairman John Williams about monetary policy and economics at the Financial Services Dinner of the Foreign Policy Association in New York.

This came amid markets' aspiration to reveal the US labor market data for the past month, which may reflect the stability of unemployment rates at 3.6%, little changed from what they were in January, with a reading of the employment change index for sectors other than agriculture showed a slowdown in the pace of job creation To 175 thousand jobs compared to 225 thousand jobs in January, while reading the average hourly income index may show that the growth accelerated to 0.3% compared to 0.2%.

This comes in conjunction with the release of the trade balance reading, which may reflect the narrowing of the deficit to $ 46.3 billion compared to $ 48.9 billion in December, and before the disclosure of the final reading of the wholesale inventory index, which may explain the stability of the decline at 0.2%, up to the participation of Williams along with a member Another on the Federal Reserve is Boston Fed President Eric Rosengren at a panel discussion titled "Monetary Policy and Lower Zero" in New York.

Other than that, last Wednesday, we followed the report that touched upon the fact that the US Congress approved a $ 8.3 billion financing package to support stakeholders in the fight against the Corona Virus, and we also followed up on Wednesday the announcement of the Director of the International Monetary Fund, Kristalina Georgieva, about a $ 50 billion aid package allocated to countries ’markets Low income and emerging around the world in the form of interest-free loans as part of efforts to combat the global spread of the Corona virus.

In the same context, Georgieva, in her speech yesterday to the "CN-NBC", expressed that the Fund would like to see the use of those funds allocated as an aid package, first to enhance health care and then to the targeted financial stimulus program and to enhance liquidity in emerging markets, and that came The package of aid after many international central banks cut interest rates and benefited from their intention to expand the adoption of stimulus if necessary.

It is noteworthy that Bank of Japan Governor Harhiko Kuroda pledged earlier this week that the Bank of Japan will take the necessary steps to stabilize the financial markets, and the Japanese Central Bank has quickly demonstrated the type of measures it will take by offering to buy 500 billion yen ($ 4.6 billion) of government bonds. With the repurchase agreement to provide liquidity to market participants, which in turn contributed to allaying investor concerns regarding the risks of the spread of Corona.

This was followed by the Reserve Bank of Australia’s resumption of interest rates on Tuesday, with the rate cut by 25 basis points to the lowest level ever at 0.50%, which came in line with expectations, with the benefit from the Australian Central Bank’s interest rate statement preparing the Bank of Australia The reserve for further reduction later, after fixing it in the previous three meetings and following its reduction three times by 25 basis points last year.

Also, we followed up on Tuesday, the Federal Reserve held a sudden meeting, during which members of the Federal Open Market Committee decided to reduce the interest on federal funds by 50 basis points to between 1.00% and 1.25% after fixing them in the previous two meetings of the Federal Reserve at between 1.50% and 1. 75%, following its three-fold reduction of 25 basis points in previous meetings last year.

Technical analysis

Gold price continues the bullish rally to approach our awaited target at 1689.33, and the price moves within the bullish channels that appear in the picture, which supports the chances of achieving a further rise in the intraday and short term, noting that exceeding the mentioned level will push the price to 1735.50 as the next main station.

Consequently, the bullish trend scenario will remain valid and active during the upcoming sessions supported by the EMA50, noting the importance of holding above 1633.60 to continue the suggested rise.

The expected trading range for today is between 1660.00 support and 1700.00 resistance.

Expected trend for today: bullish.