Gold analysis 09.04.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session amid the US dollar index rebounding for the second session in four sessions from its highest since March 26, according to the inverse relationship between them on the cusp of developments and economic data expected today Thursday by the American economy, which It included Federal Reserve Governor Jerome Powell's talk at the Brookings Institution in Washington via satellite and with market assessments of developments in the global corona virus outbreak.

At exactly 04:07 AM GMT, gold futures contracts for June delivery rose 0.24% to trade at $ 1,684.50 per ounce compared to the opening at $ 1,680.50 per ounce, knowing that the contracts started the session’s trading on a falling price gap after yesterday's trading was concluded At $ 1,684.30 an ounce, with the US dollar index down 0.03% to 100.09 compared to the opening at 100.12.

Investors are currently looking to the US economy for the release of the aid requests index for the last week on the fourth of April, which may reflect a decline of 1,648 thousand applications to 5,000 thousand applications compared to 6,648 thousand requests in the previous weekly reading, and this comes in conjunction with the disclosure of the index reading Producer prices, which is an initial indication of inflation, may reflect the contraction in the contraction to 0.3%, compared to 0.6% last February.

In the same context, the core PPI reading may show stability at zero levels versus a 0.3% contraction in the previous reading in February, while the annual PPI reading may show a slowdown in growth to 0.5% compared to 1.3% in the previous annual reading of February February, and the core annual reading of the same indicator may also reflect slowing growth to 1.2% from 1.4% in February.

This comes before we witness the disclosure of the preliminary reading of the University of Michigan index of consumer confidence, which may show a decrease to 75.0 compared to 89.1 in March, in conjunction with the release of the final reading of the wholesale inventory index, which may reflect the stability of the decline at 0.5% during January. Last January, also in conjunction with the anticipated speech by Federal Reserve Governor Jerome Powell about his country's satellite economy at the Brookings Institution.

It is noteworthy that the Federal Reserve revealed yesterday, Wednesday, the minutes of the Federal Open Market Committee meeting held on the 15th of March, that surprising meeting, which was the second in less than two weeks after the previous surprising meeting on the third of the same month, which approved the monetary policy makers at The Federal Reserve returns short-term benchmark interest rates to zero levels.

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 remained since 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points The basis is between 1.50% and 1.75%, and this comes in the wake of the committee members cutting interest three times by 25 basis points in previous meetings last year.

The minutes of the meeting, Anas, reported on Wednesday that the reduction decision is in effect from March 16, and that the Federal Open Market Committee will carry out repurchases of treasury bonds with a minimum of $ 500 billion per month and mortgage-backed securities of at least $ 200 billion per month, provided that These purchases are made at the appropriate speed to support the smooth performance of the stock market, treasury and mortgage markets.

The minutes also reported that the Federal Committee went forward with conducting forward and night repurchase agreements to ensure that the supply of reserves remains ample and support the smooth performance of the dollar financing markets in the short term. It continues to grow despite rapid developments and that the Corona virus has a clear impact on the US and global economy.

Technical analysis

The gold price did not show any strong movement in the previous sessions, to continue to fluctuate near the level of 1644.20, maintaining its stability above it, and therefore, our expectations for the upward trend will remain unchanged, supported by the positivity of the Stochastic and the moving average 50, while recalling that our next main target is at 1703.25 , While achieving it requires stability above 1644.20.

The expected trading range for today is between 1635.00 support and 1680.00 resistance.

Expected trend for today: bullish.