Gold analysis 20.03.2020

Gold futures rose during the Asian session to witness their rebound from the lowest since 16 March, when I tested the lowest since 26 November 2019 amid the decline in the US dollar index, indicating its rebound from the highest since January 4, 2017 According to the inverse relationship between them on the cusp of developments and economic data expected today by the American economy and with investors' assessment of the global stimulus to face the consequences of the spread of the Corona virus epidemic in the world.

At exactly 04:25 am GMT, gold futures contracts for April delivery rose 0.91% to trade at $ 1,485.00 per ounce compared to the opening at $ 1,471.60 per ounce, knowing that the contracts started the session’s trading on a falling price gap after yesterday's trading was concluded At $ 1,479.30 an ounce, with the US dollar index down 0.83% to 102.08 compared to the opening at 102.93.

Investors are currently awaiting the release of the housing market data by the US economy with the release of the Existing Home Sales Index, which may show a 0.9% increase to 5.50 million homes compared to a 1.3% decline at 5.46 million homes in January. Otherwise, we followed yesterday the President’s announcement American Donald Trump yesterday that the Food and Drug Agency is testing a drug for malaria in the treatment of corona virus, adding that the initial results are promising.

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 in the wake of the surprising meeting held by the Federal Reserve last Sunday, which is the second surprising meeting in less than two weeks after the previous surprising meeting in the third of this month in which the Federal Reserve monetary policy makers decided to return the short-term benchmark interest rates to levels. The zero 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.

Technical analysis

Gold price succeeded in achieving our awaited target at 1453.10, and bounced up to achieve some intraday gains, affected by the positivity of stochastic, and may test new level of 1509.00 before returning to decline again.

SMA 50 continues to press negatively on the price, to continue to suggest the overall bearish trend for the next period, whose objectives extend to 1400.00 then 1307.13 after crossing the previous level, noting that a breakout of 1509.00 will push the price to achieve more intraday gains that reach 1543.35 then 1571.20 before any New attempt to drop.

The expected trading range for today is between 1400.00 support and 1520.00 resistance.

Expected trend for today: bearish.