Gold analysis 12.05.2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session, disregarding the rise of the US dollar index to its highest level since April 24, according to the inverse relationship between them after the developments and economic data that we adopted today, Tuesday, on the Chinese economy and on the eve of developments and economic data expected today Tuesday from Before the US economy, the largest economy in the world, which includes the speech of members of the Federal Open Market Committee.

At exactly 04:18 AM GMT, gold price futures for June delivery rose 0.25% to trade at $ 1,704.20 an ounce compared to the opening at $ 1,700.00 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded yesterday's trading At $ 1,698.00 an ounce, while the US dollar index rose 0.03% to 100.25 compared to the opening at 100.22.

We have followed on from the Chinese economy to disclose inflation data with the release of the annual reading of the consumer price index, which showed slowing growth to 3.3% compared to 4.3% in the previous annual reading for the month of March, worse than expectations that indicated slowing growth to 3.7%, as for the reading The annual producer price index showed that the contraction widened to 3.1% versus 1.5%, also worse than expectations that indicated a contraction of 2.6%.

On the other hand, investors are waiting for the US economy to disclose inflation data with the release of the CPI reading that may show the contraction widening to 0.7% compared to 0.4% in March, as the fundamental reading of the index may show the contraction widening to 0.2% versus 0.1% , And the annual reading of the index may reflect slowing growth to 0.4% versus 1.5%, as the substantial annual reading may show slowing growth to 1.7% versus 2.1%.

This comes before we witness the speech of members of the Federal Open Market Committee, President of the Federal Reserve Bank of America Patrick Harker about the economic impact of the Coronavirus in the Chamber of Commerce of Delaware in Wilmington, in conjunction with the testimony of the Deputy Governor of the Federal Reserve Randall Carls on supervision and regulation before the Banking Committee of the Council The elders in Washington.

Up to the US Treasury revealed a reading of the federal budget, which may reflect the widening deficit of $ 729.7 billion compared to $ 119.1 billion in March, before we witness the speech of the Federal Open Market Committee member and President of the Cleveland Bank Federal Reserve Loretta Mester about monetary policy And economic outlook at the Association of Certified Financial Analysts in Chicago, via satellite.

It is noteworthy that US Treasury Secretary Stephen Mnuchin warned last Sunday that unemployment rates in his country "may get worse before they improve" and that unemployment rates may have reached 25%, and his statements came hours after the American labor market data showed last Friday that unemployment rates in the states increased The United Nations had the highest in about seven decades, to 14.7%, with about 20.5 million jobs lost during April due to the outbreak of the Coronavirus.

Other than that, markets are still assessing the challenges that global economies may face to reopening and easing the newly imposed social divergence measures as part of efforts to curb the outbreak of the Coronavirus, especially in the wake of South Korea's warning this weekend of a possible second wave of HIV cases. Coronary, which reinforced anxiety from a possible second wave of deadly virus outbreaks.

Technical analysis

The price of gold provided further slight negative trading to move below the EMA50, while the stochastic oscillator continues to oversold areas in the sale, waiting for the price to stimulate the resumption of the expected bullish direction for the coming period, which mainly targets 1747.43 then 1785.00 levels.

Therefore, we will maintain our bullish expectations unless the 1678.45 level is broken and stability below it, noting that breaching 1722.00 will free the price from negative pressures and the direction to achieve the suggested targets.

The expected trading range for today is between 1685.00 support and 1730.00 resistance.

Expected trend for today: bullish.