Gold analysis 24.03.2020

Gold futures rose during the Asian session to witness the highest since March 12, with the US dollar index rebounding for the second session in three sessions from the highest since January 4, 2017, according to the inverse relationship between them on the threshold of developments and economic data expected today Tuesday By the American economy, the largest economy in the world, and with investors evaluating the incentive to face the repercussions of the spread of the global corona virus.

At exactly 04:46 AM GMT, gold price futures for April delivery rose 2.27% to trade at $ 1,601.90 per ounce compared to the opening at $ 1,566.30 per ounce, knowing that the contracts started the trading session on a falling price gap after it concluded yesterday's trading At $ 1,572.70 an ounce, with the US dollar index down 0.14% to 101.71 compared to the opening at 102.14.

Investors are awaiting the disclosure of the initial reading of the Markit manufacturing and services PMI for the United States, which may reflect the contraction of the industrial sector in the largest industrial country in the world to a value of 45.1 compared to a expansion of 50.7 in the previous reading for the month of February, while we may witness a widening contraction Service sector to 44.1 compared to 49.4 in February.

This comes before we also witnessed by the US economy the disclosure of the Richmond Industrial Index reading that may reflect the widening contraction to 10 versus 2 in February, up to the disclosure of housing market data from the release of the New Home Sales Index, which may indicate a decline 1.8% to about 750 thousand homes compared to a rise of 1.8% at about 764 thousand homes in January.

Other than that, we followed yesterday the Federal Reserve announced a new stimulus package to support the economy from the repercussions of the Corona virus, and the Federal Reserve statement stated that it is committed to using a set of tools to support the economy in this difficult period and thus enhance employment and price stability, explaining that the Federal Open Market Committee has gone ahead Go ahead and closely monitor market conditions and evaluate the appropriate pace of securities purchases at future meetings.

The Fed’s statement also stated that the Federal Committee decided, as of Monday, March 23, that the bank would commit to conducting open market operations according to need, in addition to establishing a new loan program to support students, and that a loan program to support small and medium-sized companies would be announced soon, and we would like to point out that These measures by the Federal Reserve are unprecedented, as it does not place any restrictions on the assets that have been announced to be purchased as necessary.

This comes in the wake of the surprising meeting of the Federal Reserve on the 16th of March, which is the second surprising meeting in less than two weeks, after the previous surprising meeting on the third of this month in which the monetary policy makers of the Federal Reserve decided to return at the benchmark interest rates. Short-term to 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 at the time by 100 basis points to between zero levels and 0.25%, which it remained in since 2008 until the meeting of 27-28 October 2015, after reducing it in the previous emergency meeting by 50 A base point is between 1.00% and 1.25%, and this comes after the committee members cut interest three times by 25 basis points in previous meetings last year.

Technical analysis

The gold price opened today's trading with a strong rise to penetrate the level of 1571.20 and is trying to stabilize above it, which puts the price inside the main bullish channel again, indicating the price trend to restore the main bullish path, pending achieving more gains during the upcoming sessions.

Thus, the bullish trend will be expected for today, and targets start at 1599.00 and extend to 1633.60, noting that breaking the 1571.20 and then 1564.50 levels will stop the suggested rise and press the price to drop again.

The expected trading range for today is between 1543.00 support and 1600.00 resistance.

Expected trend for today: bullish.