Gold analysis 27.03.2020

Gold price futures fluctuated in a narrow range tilted to a decline during the Asian session to witness the resumption of its second session in three sessions from the top since March 9, when it tested its highest since December 18, 2012, condoning the rise of the US dollar index For the fifth session in six sessions from above, since January 4, 2017, according to the inverse relationship between them.

This comes on the cusp of developments and economic data expected today Friday by the US economy, the largest economy in the world, which includes the House of Representatives voting on the stimulus package, which is the largest in the history of the United States, and in the shadow of investors ’assessment of financial markets for monetary and financial stimulus that aims to counter the negative repercussions of the outbreak Corona Virus.

At exactly 04:48 AM GMT, gold price futures for April delivery decreased 0.27% to trade at $ 1,648.90 per ounce compared to the opening at $ 1,653.40 per ounce, knowing that the contracts started the session’s trading on a falling price gap after it concluded yesterday's trading At $ 1,660.30 an ounce, while the US dollar index fell 0.27% to 98.99 compared to the opening at 99.26.

Investors are currently awaiting by the US economy the disclosure of personal spending and income data, which may reflect the stability of personal spending growth at 0.2%, little changed from the previous reading last January, and the slowdown in personal income growth to 0.4% compared to 0.6% in January / January, while a reading of the core personal consumption expenditures index may show that growth accelerated to 0.2% compared to 0.1% in January.

This comes before the disclosure of the final reading of the University of Michigan's index of consumer confidence, which may show a widening contraction to 90.0 compared to 95.9 in the preliminary reading of the previous month and compared to 95.9 last February.

In another context, we followed on Thursday, Federal Reserve Governor Jerome Powell expressed the fact that the Federal Reserve still has enough space to take further measures, noting that every dollar support from the Treasury can provide $ 10 of federal loans, adding that The Federal Reserve is ready to provide sufficient liquidity, while stating that the current crisis is not like the usual recession.

Powell also noted yesterday that when the Corona virus is controlled, confidence will return to the markets and then we may see a good recovery, while stating that the American economy may go through a recession and that the priority is to put the virus under control, explaining that if Corona is controlled, the economy will return to recovery, adding that no There is an error fundamentally in the economy, while expressing its expectations for the economy to recover during the second half, depending on the extent of limiting the spread of the virus.

Other than that, we also followed up on Wednesday 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 global solidarity to face this serious threat and that The world must prepare 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, and according to the latest figures issued by the organization, the number of cases has increased Infected with the virus to nearly 466 thousand and 21,031 people were killed in 199 countries.

Technical analysis

The price of gold finds it difficult to pass the level of 1633.60, to show side trading around this level, waiting to get rid of the negative momentum and gain a positive momentum that is enough to push the price to exceed the mentioned level and then open the way for the trend towards 1689.30 which represents our next positive station.

SMA 50 continues to provide positive support for the price, so we will continue to favor the bullish trend for the next period unless 1599.10 level is broken and stability below it.

The expected trading range for today is between 1610.00 support and 1660.00 resistance.

Expected trend for today: bullish.