Gold analysis 12.03.2020

Gold price futures fluctuated in a narrow range that tilted higher during the Asian session to witness its rebound from the lowest since March 3, with the dollar index rebounding to the eleventh session in sixteen sessions from the top since April 21, 2017 according to the inverse relationship between them On the cusp of developments and economic data expected Thursday by the US economy, the largest economy in the world and in the wake of US President Donald Trump's speech, which did not succeed in allaying investor fears after the World Health Organization declared the Corona virus a global pandemic.

At exactly 04:28 AM GMT, gold price futures for April delivery rose 0.20% to trade at $ 1,636.30 per ounce compared to the opening at $ 1,633.10 per ounce, knowing that the contracts started the trading session on a falling price gap after it concluded yesterday's trading At $ 1,642.30 an ounce, with the US dollar index down 0.40% to 96.27 compared to the opening at 96.66.

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 a 0.1% contraction versus 0.5% growth last January, while a substantial reading of the same indicator may show slowing growth to 0.1% versus 0.5 %, And the annual reading of the same indicator may show a slowdown in growth to 1.8% versus 2.1%, while the substantial annual reading of the index may reflect stability at 1.7%.

This also comes in conjunction with the issuance of the index of subsidy requests for the last week on the seventh of this month, which may show an increase by two thousand requests to 218 thousand applications compared to 216 thousand requests in the previous weekly reading, as may read the reading of the index of subsidy requests continued for the last week on 29 of Last February, an increase of 4 thousand requests to 1,733 thousand requests compared to 1,729 thousand requests in the previous weekly reading.

Other than that, we have just followed the press conference held by US President Donald Trump, during which he announced the suspension of all travel to Europe and a number of incentive measures, which included urging Congress to agree to an unspecified procedure for salary tax exemptions, expressing his confidence that America will limit One of the dangers it might pose, but his speech did not give investors the confidence that the United States is tightening its grip on the virus.

In another context, we followed yesterday, the US Treasury Secretary expressed during his testimony about the budget proposed by the Trump administration for the fiscal year 2021/2022 before the Subcommittee on Foreign Operations and Related Programs in Washington, that public health is the highest priority for the US government in this The budget, noting that it was approved by Congress to allocate $ 8 billion to combat Corona.

The US Secretary of Finance also stated that the International Monetary Fund and the World Bank are committed to providing adequate financial support to tackle the Corona virus, while expressing the fact that the US government aims to provide liquidity and direct financing to small and medium-sized projects and that the fiscal stimulus package will coincide with the reduction of salary taxes, indicating that hundreds will be pumped Billions of dollars in the US economy coinciding with tax cuts.

On the other hand, yesterday we followed the World Health Organization's announcement of a global pandemic virus and the statements of the Director-General of the World Health Organization, "We are extremely concerned about the spread, hidden danger, and worrying levels of inaction," adding, "We have sounded the alarm loudly and clearly," according to the latest figures. Issued by the organization, the number of cases infected with the virus has increased to more than 118 thousand, and 4,292 people have died in 114 countries.

Otherwise, the markets are looking forward to what will be the outcome of the European Central Bank meeting and the press conference for the European Central Governorate Christine Lagarde, amid expectations that the European Central Bank will deepen the negative interest rate, especially after the recent statements that it may move as soon as possible, and this comes hours after the Bank of England cut rates Interest is 50 basis points to be attached to the Federal Reserve and the Bank of Canada in addition to the Reserve Bank of Australia.

According to Bloomberg, the European Central Bank’s governorate warned Lagarde yesterday of the possibility of Europe facing a crisis similar to the global economic crisis in 2008, as it called on decision-makers to act quickly to avoid the repercussions of the outbreak of the Corona virus, and this came hours after the European Commission President Ursula Von announced Line last Tuesday, the European Union intends to inject a 25 billion euro financing package to counter the consequences of the Corona virus.

It is noteworthy that German Chancellor Angela Merkel pledged yesterday to do "everything necessary" to boost the economy of Germany, the largest economy in the euro area, and this came after Italian Prime Minister Giuseppe Conte reported that a stimulus plan of about 25 billion euros had been put in place to support the economy of his country, the third largest economy in the region. In the face of the repercussions of the Corona virus, this came after his government announced earlier this week to expand the quarantine to include the country as a whole because it contained the virus.

Technical analysis

The price of gold is testing a pivotal support 1633.60 now, which requires attention from the upcoming trading, as breaking this level will put the price under additional negative pressure initially targeting 1599.10 areas before any new positive attempt.

The stochastic is showing oversold oversold now to support the strength of the current areas, and therefore, we will maintain our expectations for the bullish trend unless it breaks the level of 1633.60 and remains below it, noting that our first target is at 1689.33.

The expected trading range for today is between 1620.00 support and 1660.00 resistance.

Expected trend for today: bullish.