Gold analysis 18.05.2020

Gold prices rose during the Asian session to witness the highest since April 14, when it experienced the highest since the fifth of October 2012, which was the highest since November 9, 2011, with the decline in the US dollar index for the first time In four sessions, according to the inverse relationship between them, following the interview conducted by Federal Reserve Governor Jerome Powell with the program "60 Minutes" on "CBS" and on the cusp of developments and economic data expected on Monday by the US economy.

At 05:10 AM GMT, gold price futures for June delivery rose 0.73% to trade at $ 1,770.40 per ounce compared to the opening at $ 1,757.50 per ounce, knowing that the contracts started the trading session on an upward price gap after the week's trades were concluded The past at $ 1,756.30 an ounce, with the US dollar index down 0.06% to 100.35 compared to the opening at 100.41.

We have just followed the warning of Federal Reserve Governor Jerome Powell in the "60 Minutes" program that the economic downturn may continue until late 2021, explaining that his country's economic downturn may reach between 20% and 30% "easily" during the current quarterly quarter with Coronavirus outbreak, adding that he expects "the economy to recover steadily during the second half of this year," as long as America avoids "the second wave of the virus."

Powell noted that "it is very important to avoid this. Because it will be damaging to the economy and also to the confidence of the public," explaining that "assuming there is no second wave of the virus, I think you will see the economy recover steadily during the second half," adding that "in order for the economy to fully recover A vaccine must wait, "Powell also called on US lawmakers to pass more economic incentives and relief aid, while telling him that unemployment rates could peak at 25%.

Otherwise, investors are currently waiting for the US economy to reveal the housing market data with the release of the housing index reading by the National Association of Home Builders, which may reflect a rise to $ 35 compared to 30 last April, and we would like to point out that the Democrats passed last Friday In the House of Representatives a stimulus of $ 3 trillion, but it is not expected that the stimulus will pass the Republican-controlled Senate.

Technical analysis

The gold price continues to fluctuate around 1747.43 level and attempts are being made to breach it now, which supports the chances of the continuation of the bullish trend scenario in the longer term, paving the way for heading towards our next main target that extends to 1785.00.

SMA 50 continues to support the suggested bullish wave, which will remain valid and effective provided stability above 1717.00 as the first protection factor for the positive scenario.

The expected trading range for today is between 1730.00 support and 1785.00 resistance.

Expected trend for today: bullish.