Gold analysis 10.04.2020

Gold futures rose during the Asian session to witness the highest since November 23, 2012 with the negative stability of the US dollar index according to the inverse relationship between them after the developments and economic data that were reported by the Chinese economy as the largest consumer of metals globally and on the threshold of developments and economic data expected on Friday By the US economy, which includes the talk of members of the Federal Open Market Committee and the center of investor evaluation to the developments and repercussions of the outbreak of the Corona virus globally.

At exactly 04:19 AM GMT, gold price futures for June delivery rose 4.30% to trade at $ 1,752.80 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 it concluded yesterday's trading At $ 1,680.50 an ounce, with the US dollar index down 0.12% to 99.46 compared to the opening at 99.58.

On the Chinese economy, we have followed the disclosure of the inflation data for March, with the release of the annual CPI reading, which showed a slowdown in growth to 4.3% compared to 5.2% in the previous annual reading for the month of February, below expectations that slowing growth to 4.9%. As for the annual reading of the producer price index, it showed that the contraction expanded to 1.5% compared to 0.4%, also worse than the expectations that indicated a contraction of 1.1%.

On the other hand, the markets are looking to the US economy to reveal inflation data with the release of the consumer price index, which may reflect a 0.3% contraction versus 0.1% growth in February, while the core reading of the index may show a slowdown in growth to 0.1% versus 0.2% in February, the annual reading of the index may show a slowdown in growth to 1.6% versus 2.3%, as a substantial annual reading may show a slowdown in growth to 2.3% versus 2.4%.

This comes before we witness later in the day the speech of the members of the Federal Open Market Committee, President of the Cleveland Bank, Federal Reserve Loretta Mister, who is expected to talk about maintaining economic health during the crisis through satellites, and Deputy Governor of the Federal Reserve, Randall Carls, who is scheduled That talks about the banking system at the University of Utah also via satellite.

In the same context, we followed yesterday, Thursday, Federal Reserve Governor Jerome Powell about the state economy via satellites at the Brookings Institution, through which he noted that unemployment rates may rise strongly temporarily and that there will be entities that need direct financial support, while stating that the reserve The Fed has the ability to lend, but it does not have the ability to spend.

Powell also noted yesterday that there are signs that the recovery may be robust when it happens, while addressing the fact that market conditions have generally improved following measures taken by the Federal Reserve, and this came in the wake of his assertion that the Federal Reserve still has enough room to Take more action and stimulus to support the world's largest economy.

Powell's comments came hours after the Federal Reserve suddenly announced that additional $ 2.3 trillion in loans would be provided to support the economy and that it was working to provide assistance to all families and workers in American companies of all sizes, explaining that the debt of high-yielding companies would be purchased in addition to supporting government spending As well as the debts of small companies.

It is noteworthy that the Federal Reserve revealed last Wednesday the minutes of the Federal Open Market Committee meeting held on March 15th that surprising meeting, which was the second in less than two weeks after the previous surprise 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.

Technical analysis

The price of gold provides more positive trading to continue to approach our awaited target at 1703.25, and gets continuous positive support from the EMA50, to support opportunities to breach this level and open the way for achieving more positive goals, where the next target reaches 1770.00.

Thus, the bullish trend scenario will remain valid and active during the upcoming sessions, organized within the main bullish channel that appears in the picture, noting the importance of stability above 1644.20 as a first condition for the continuation of the suggested bullish wave.

The expected trading range for today is between 1665.00 support and 1710.00 resistance

Expected trend for today: bullish