Gold analysis 19.03.2020

Gold futures fell during the Asian session to witness their bounce back to the eighth session in nine sessions from the highest since December 18, 2012, explaining the lowest since 16 of this month, when it tested the lowest since November 26 amid a high index The US dollar, indicating its stability near its highest in three years, according to the inverse relationship between them, with the growing fears of a global outbreak of the Corona virus, and on the cusp of developments and economic data expected Thursday by the US economy, the largest economy in the world.

At exactly 04:17 AM GMT, gold price futures for April delivery fell 1.05% to trade at $ 1,471.80 per ounce compared to the opening at $ 1,487.20 per ounce, after yesterday's trading closed at $ 1,477.90 per ounce, with the US dollar index rising 0.57 % To 101.36 compared to opening at 100.79.

Investors are currently awaiting the release of the industrial sector data by the US economy, with the release of the Philadelphia Industrial Index reading, which may reflect a shrinkage of expansion to what amounted to 9.5 compared to 36.7 last February, and this comes in conjunction with the release of the index of subsidy requests for the past week on the 14th of March, which may reflect a rise of 9 thousand requests to 220 thousand requests compared to 211 thousand requests in the previous weekly reading.

This also comes in conjunction with the issuance of the reading of the ongoing subsidy requests for the last week on the seventh of this month, which may reflect an increase of 13 thousand requests to 1,735 thousand applications compared to 1,722 thousand requests, up to the issuance of the reading of the current account, which may reflect the shrinking of the deficit to the value of 109 $ 1 billion versus $ 124 billion in the past third quarter, and with the reading of leading indicators showing growth slowed to 0.1% from 0.8% in January.

This comes hours after the Federal Reserve announced that it will enter the commercial paper markets, which have been frozen in the midst of the economic turmoil, threatening businesses that need financing between today and the other, and the Federal Open Market Committee stated on Tuesday that it will establish a financing facilitation committee for commercial papers to support the cash flow of homes and businesses and that it has formed A special purpose vehicle for purchasing any securities of unsecured assets with $ 10 billion in support from the Treasury.

This came hours after the Federal Reserve’s surprising meeting last Sunday, which is the second surprising meeting in less than two weeks, after the previous sudden meeting on the third of this month in which the Federal Reserve’s monetary policy makers decided to return to the short-term benchmark interest rates. Zero levels reached in the wake of the worsening global financial crisis more than a decade ago.

The members of the Federal Open Market Committee reduced the interest on federal funds by 100 basis points to between zero levels and 0.25%, which they remained from 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points. The basis is between 1.00% and 1.25%, and this comes in the wake of the committee members cutting interest three times by 25 basis points in previous meetings last year.

The Federal Reserve monetary policy statement stated that the decision to reduce will be effective from Monday March 16, and that the Federal Open Market Committee will carry out repurchases of treasury bonds at a minimum of $ 500 billion per month and mortgage-backed securities at $ 200 billion per month At least, these purchases should be made at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage agency.

Technical analysis

Gold price confirmed the breaking of the level of 1509.00 after the daily candle closed below it, and the day begins with a noticeable decrease to reach the outskirts of the awaited target at 1453.10, noting that we are likely to continue the negative pressure to break the mentioned level and achieve more negative targets that reach 1400.00 and extend to 1307.10.

From here, the bearish bias will remain dominant during the upcoming sessions, taking into consideration that the breach of 1509.00 might push the price to test the areas of 1543.35 then 1571.20 before any new attempt to decline.

The expected trading range for today is between 1400.00 support and 1500.00 resistance.

Expected trend for today: bearish.