Gold analysis 30.04.2020

Gold price futures fluctuated in a narrow range tilted toward a decline during the Asian session amid the rise 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 cusp of developments and economic data expected Thursday by the American economy the largest economy In the world, in the shadow of market pricing to ease restrictions and the end of the global closure, with many countries announcing plans to ease restrictions.

At 04:51 AM GMT, gold price futures for June delivery decreased 0.10% to trade at $ 1,727.80 per ounce compared to the opening at $ 1,729.60 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday's trading was concluded At $ 1,713.40 an ounce, with the US dollar index rising 0.11% to 99.59 compared to the opening at 99.48.

We have followed the disclosure by the China Federation of Logistics and Procurement (CFLP) on the readings of the Industrial and Service Purchasing Managers' Index, which indicated that the expansion of the industrial sector shrank to 50.8 compared to 52.0 last March, below the expectations that the expansion in the sector decreased to 51.0, while the service sector expanded to Its value was 53.2 compared to 52.3 in March, beating expectations for an expansion of 52.7.

On the other hand, investors are currently awaiting by the US economy the issuance of the index of subsidy requests for the last week on April 25, which may reflect a decline of 927 thousand requests to 3,500 thousand requests compared to 4,427 thousand requests in the previous weekly reading, while it may appear reading requests The ongoing benefit for the last week on the 18th of this month, increasing by 3,262 thousand applications to 19,238 thousand applications compared to 15,976 thousand requests.

This comes in conjunction with the disclosure of personal spending and income data, which may reflect a decrease in personal spending by 4.8% against a rise of 0.2% in February, and a decrease in personal income by 1.6% against a rise of 0.6% in February, as the reading of the personal consumption expenditures index may show. Al-Jawhary declined 0.1% compared to a 0.2% increase in February.

It also comes in conjunction with the disclosure of the reading of the unit cost index, which may reflect the stability of growth at 0.7%, little changed from what it was in the last quarter, and before we witness the disclosure of industrial sector data for the largest industrial country in the world with the release of the index reading Chicago Purchasing Managers, which may reflect the widening contraction to 38.0 compared to 47.8 last March.

Otherwise, yesterday we followed the Fed’s monetary policymakers ’decision to keep short-term benchmark interest rates at zero levels between zero and 0.25% at the FOMC meeting April 28-29, which came in line with expectations And, members of the Committee stressed that they are moving forward in using all the tools of the Federal Reserve to support the US economy in these difficult times.

In the same context, members of the Federal Open Market Committee discussed the fact that the outbreak of the Coronavirus has caused human and economic suffering within the United States and abroad and that the preventive measures adopted by countries globally weigh on economic activity and that the decline in demand and the collapse of oil prices reduces inflationary pressures while benefiting That this health crisis will broadly affect economic activity and the labor market in addition to inflation.

The members of the Federal Committee also mentioned that the interest rate on federal funds is expected to remain at zero levels to support the flow of credit to families and companies and that the Federal Reserve is going ahead with the purchase of treasury bonds at $ 500 billion per month and mortgage bonds at least $ 200 per month until the economy has shown signs of recovery following the current crisis and stabilizing prices, as well as an improvement in the labor market.

The Federal Committee also stated that it will continue to follow the economic data and data related to health care and global developments and assess the current and expected conditions within its work to reach the goal of inflation at two percent and achieve the maximum benefit in the labor market, adding that it will monitor the market conditions closely and is ready to amend its tools if It took that.

The decisions and directions of the Federal Committee came yesterday hours after the initial reading of the GDP showed the largest contraction for the United States from the last quarter of 2008 with a contraction of 4.8% in the first quarter before we witnessed the Federal Reserve Governor Jerome Powell at the press conference held in Following the end of the activities of the Federal Committee meeting, he expected his country to shrink its economy in an unprecedented way in the second quarter.

Technical analysis

The price of gold ended yesterday's trading with an upward tendency to settle above SMA 50, and we notice that the stochastic indicator starts to cross positively now, waiting for the price to be stimulated to provide more positive trading during the upcoming sessions, noting that we need to breach the 1732.50 level to facilitate the task of rushing towards targets The suggested bullish wave that starts at 1747.43 then 1780.00.

In general, we will continue to favor the bullish trend for the next period unless the price faces strong negative pressure to break 1678.45 and settle below it.

The expected trading range for today is between 1690.00 support and 1740.00 resistance.

Expected trend for today: bullish.