GOLD analysis 26.03.2020

Gold price futures fell to witness their bounce for the second consecutive session from their highest since March 9th, when they tested their highest since December 18, 2012, disregarding the bounce of the dollar index for the fourth session in five sessions from its highest since the fourth of December January 2017, according to the inverse relationship between them, on the cusp of developments and economic data expected on Thursday by the US economy and amid the weight of investors for global monetary stimulus, which aims to counter the negative repercussions of the outbreak of the Corona virus.

At exactly 03:47 AM GMT, gold price futures for April delivery fell 0.84% ​​to trade at $ 1,628.50 per ounce compared to the opening at $ 1,642.20 per ounce, knowing that the contracts started the session’s trading on an upward price gap after it concluded yesterday's trading At $ 1,634.30 an ounce, while the US dollar index fell 0.23% to 100.73 compared to the opening at 100.96.

Investors are currently awaiting by the US economy the disclosure of the GDP reading, which may reflect the stability of the expansion of the largest economy in the world at 2.1%, unchanged from the previous initial reading for the fourth and third quarter of the past, just as the reading of the same index measured in prices may reflect the stability of growth at 1.3 % Unchanged from the previous initial reading and against a growth of 1.8% in the previous reading for the third quarter.

This comes in conjunction with the issuance of the reading of the benefit requests index for the last week on March 21, which may reflect an increase of 1,367 thousand applications to 1,648 thousand applications compared to 281 thousand requests in the previous weekly reading, as the reading of the continuing benefit requests for the last week may appear on the 14th of This month, an increase of 81 thousand requests to 1,782 thousand requests compared to 1,701 thousand requests in the previous reading.

This also comes in conjunction with the release of the merchandise trade balance index, which may explain the deficit narrowing to $ 64.5 billion compared to $ 65.9 billion last January, and with the disclosure of the initial reading of the wholesale inventory index, which may reflect the contraction of the decline to 0.2% compared to 0.4% In January, otherwise, we followed yesterday the White House announcing that it had reached an agreement with Senate leaders about the stimulus package, which is estimated at $ 2 trillion.

In Europe, the leaders of the European Union are moving towards adopting a financial package of their own within the global efforts aimed at facing the repercussions of the Coruna outbreak, and this comes after major international central banks cut interest rates and the European Federal and Central Reserve Bank in addition to the Bank of England and the Bank of Japan announced the expansion of asset purchase programs.

Other than that, yesterday we followed the statements of the Director-General of the World Health Organization, Tidros Adhanum Gebresus, through which he expressed that children are vulnerable to infection with the virus (COVID-19) or what is known in the media as Coronavirus like the rest of the people, explaining that it is the global solidarity to face this serious threat and that The world is preparing for more severe measures to confront the coronavirus.

The Director-General of the organization, Gebrissos, also mentioned that precautionary measures should be taken, such as preventing gatherings and travel in addition to tracking and monitoring infected cases, adding that medical and health personnel, especially in poor countries where the virus is easy to spread, must be protected, according to the latest figures issued by the organization, so the number of cases has increased Infected with the virus to nearly 417,000 and 18,589 people were killed in 196 countries.

Technical analysis

Gold price faced negative pressure to test the pivotal support 1599.10 again, accompanied by stochastic negation of the negative momentum and approaching oversold areas in the sale, pending obtaining a positive incentive enough to push the price to resume the main bullish trend, whose goals begin to exceed 1633.60 level to open the way towards heading towards 1689.30 as the next stop.

Thus, the bullish trend scenario will remain valid for the upcoming period, noting that a break of 1599.10 will press the price to test the most important support for the short term trading at 1571.20 before any new attempt to rise.

The expected trading range for today is between 1585.00 support and 1635.00 resistance.

Expected trend for today: bullish.