Gold analysis 13.05.2020

Gold prices fluctuated in a narrow range tilted towards the decline during the Asian session, condoning the decline in the US dollar index for the second consecutive session from its highest since April 24, according to the inverse relationship between them on the threshold of developments and economic data expected on Wednesday by the American economy, the largest economy in The world which includes Fed Governor Jerome Powell talk.

At exactly 03:55 AM GMT, gold price futures for June delivery decreased 0.02% to trade at $ 1,704.70 per ounce compared to the opening at $ 1,705.00 per ounce, knowing that the contracts started the session’s trading on a falling price gap after yesterday's trading was concluded At $ 1,706.80 an ounce, while the US dollar index fell 0.03% to 99.98 compared to the opening at 100.00.

Investors are currently awaiting by the US economy the disclosure of the PPI reading, which is an initial indicator of inflation, which may reflect the widening contraction to 0.5% compared to 0.3% in March, while the fundamental reading of the same index may show a 0.1% contraction versus 0.2% growth, The annual reading of the index may show a contraction of 0.2% against a growth of 0.7%, while a substantial annual reading may reflect a slowdown in growth to 0.9% versus 1.4%.

This comes, hours after inflation data for the United States showed yesterday that the contraction widened in April, according to the CPI reading and the core reading of the same index, and the annual readings showed slowing growth in a way that exceeded expectations. Federal Reserve Jerome Powell on economic issues at an online seminar organized by the Peterson Institute for International Economics.

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.

Technical analysis

The gold price returns to fluctuate around the EMA50, and it tries to consolidate positively despite the stochastic negativity, to keep our expectations for the bullish trend that targets 1747.43 then 1785.00 mainly.

The triangle shown on the above chart has a strong resistance at 1720.00 now, and the price needs to breach this level to confirm the rally towards the awaited targets, taking into consideration that breaking 1678.45 will stop the suggested rise and put the price under the downward corrective pressure.

The expected trading range for today is between 1690.00 support and 1735.00 resistance.

Expected trend for today: bullish.