Gold analysis 19.05.2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session, while neglecting the positive stability of the US dollar index according to the inverse relationship between them on the threshold of developments and economic data expected on Tuesday by the American economy, which includes the testimony of Federal Reserve Governor Jerome Powell and US Treasury Secretary Stephen Mnuchin before The Senate, with market pricing for measures to gradually reopen the US economy and some other global economies, is returning to normal.

At 05:10 am GMT, gold futures contracts for June delivery rose 0.28% to trade at $ 1,739.70 per ounce compared to the opening at $ 1,734.80 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded yesterday's trading At $ 1,734.40 an ounce, while the US dollar index rose 0.06% to 99.69 compared to the opening at 99.63.

The markets are currently awaiting the release of the housing market data by the American economy, with the release of both the index of start-up homes and the construction permit index and amid expectations that building permits will reflect the widening of the decline to about 1.00 million permits compared to about 1.35 million permits last March. The readings for the homes that were constructed may also reflect a widening decline to about 0.95 million homes compared to about 1.22 million homes in March.

This comes before we witness Federal Reserve Governor Jerome Powell and US Treasury Secretary Stephen Mnuchin about the relief assistance that has been approved by the Federal Reserve and the US Treasury to reduce the repercussions of the coronavirus outbreak, in addition to their testimony about the economic security law before the Banking, Housing and Urban Affairs Commission In the US Senate in Washington via satellite.

Markets are also looking forward to the results of the speech of Federal Open Market Committee member and President of the Federal Reserve Bank of Minneapolis Neil Kachkari regarding the economy. The talk of General Financial Mills in Minneapolis also via satellite, and we would like to point out that the Federal Reserve Governor Powell is expected to deliver remarks tomorrow, Thursday. The editorial in the Federal Reserve's talk about the Coronavirus, via satellite.

This comes hours after Powell warned last Sunday 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 the outbreak of a virus epidemic. Corona, explaining that he expected "the economy to recover steadily during the second half of this year," as long as America avoids "the second wave of the virus."

Powell then noted that "it is very important to avoid this. It will be devastating to the economy and public confidence," adding that "assuming there is no second wave of the virus, I think you will see the economy recover steadily during the second half," explaining 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%.

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.