Gold analysis 01.04.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session to witness its rebound from the lowest since March 24, when it reflected the best daily performance since September 17, 2008 amid the dollar index resumed its rebound from the lowest since March 17 / March for the second session in four sessions according to the inverse relationship between them on the threshold of developments and economic data expected today, Wednesday, by the US economy.

At exactly 04:10 AM GMT, gold futures contracts for June delivery rose 0.47% to trade at $ 1,596.90 per ounce compared to the opening at $ 1,589.40 per ounce, knowing that the contracts started the trading session on a falling price gap after it concluded yesterday's trading At $ 1,596.60 an ounce, with the US dollar index rising 0.15% to 99.12 compared to the opening at 98.97.

Investors are currently awaiting by the US economy to disclose preliminary data for the labor market with the release of the index of change in private sector jobs, which may reflect the loss of 150,000 jobs compared to 183,000 added jobs in February, and this comes hours before the disclosure after Friday Monthly report of jobs except agricultural and unemployment rates in addition to the average hourly earnings for the month of March.

Markets are also looking to reveal the final reading of the manufacturing PMI by Markit for the United States, which may reflect the widening contraction to 48.2 compared to 49.2 in the initial reading last month and against expansion at 50.7 in February, before we witness the release of the spending index reading On construction, which shows growth slowed to 0.6% versus 1.8% in January.

This comes in conjunction with the disclosure also by the largest industrialized country in the world about the reading of the Institute of Industrial Supply index, which may show a contraction to 44.9 compared to a expansion at 50.1 in February, while a reading of the Institute of Industrial Supply measured in prices may indicate the extent of the contraction to 41.6 Versus 45.9, and we would like to point out, because the reading reading at a value of 50 or higher reflects a widening, while its reading below 50 indicates a contraction.

It is noteworthy that US President Donald Trump recently signed a stimulus package estimated at $ 2 trillion to support the largest economy in the world and American families and companies in facing the repercussions of the Corona virus, after the package was passed by the US Congress last week, and Trump approved last Sunday the extension Guidelines for social restrictions in the United States until next April 30.

Other than that, today we followed the disclosure of the industrial sector data for China, the second largest economy in the world and the second largest industrialized country globally, with the release of the Caixin manufacturing PMI reading by Markit for China, which showed expansion of 50.1 compared to a contraction at 40.3 in February , Outperforming expectations for a contraction of 45.0.

This came hours after the China Federation of Logistics and Procurement (CFLP) disclosed yesterday the industrial and service sector data for March, which showed expansion in the wake of the worst performance in its history in February due to the quarantine and closure implications that China recently adopted as part of the efforts. Aiming to reduce the spread of the Coronavirus, which started in Wuhan, China.

Last Monday, we followed the announcement of the Russian Central Bank, the world's largest buyer of gold, of its intention to stop its purchase of gold at the beginning of April, and did not provide reasons for that suspension, while stating that its future decisions will depend on the state of the financial markets, and we would like to point out that the outbreak of the Corona virus caused Stopping hundreds of flights, which prevents the transport of gold and disrupts global supply chains, and Russia's reserves are estimated until the end of February, according to the latest data of the Russian Central Bank at about 73.6 million ounces, or about $ 119.8 billion.

Technical analysis

The decline in the price of gold stopped at the pivotal support 1571.20, which represents the support level of the main bullish channel that meets the 50% Fibonacci correction level, noting that the stochastic indicator continues to provide oversold signals in the sale, which provides positive opportunities to resume the main bullish trend during the upcoming sessions, pending Test levels of 1599.10 then 1633.60 initially.

Thus, we are likely to witness positive trading today, so that the bullish scenario will remain intact and active in the intraday and short term provided that the price maintains its stability above 1571.20.

The expected trading range for today is between 1570.00 support and 1610.00 resistance

Expected trend for today: bullish