Gold analysis 28.05.2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce for the second session from the lowest since May 7, condoning the rise of the US dollar index, indicating its bounce to the second session from the lowest since the fourth of this month, when he tested the lowest for 30 From March, according to the inverse relationship between them, on the cusp of developments and economic data expected on Thursday by the US economy, and as investors awaited the reopening of many global economies against tensions between Washington and Beijing.

At exactly 04:17 AM GMT, gold futures contracts for next August delivery rose 0.10% to trade at $ 1,726.80 per ounce compared to the opening at $ 1,725.00 per ounce, knowing that the contracts started the trading session on a falling price gap after it concluded trading Yesterday at $ 1,726.80 an ounce, while the US dollar index rose 0.04% to 98.96 compared to the opening at 98.92.

We followed a short while ago, Reserve Bank of Australia Governor Philip Lowe testified before the Australian Senate Selection Committee about the Coronavirus that "the economic downturn may not be as severe as previously thought", which in one way or another boosted investor appetite for risk and subsequently supported Asian stock indices performed amid optimism that many global economies have reopened and that the worst is over.

On the other hand, investors are currently awaiting by the US economy the disclosure of the second reading of the GDP index, which may confirm the contraction of the largest economy in the world by 4.8% during the first quarter, little changed from the previous initial reading and against a growth of 2.1% in the fourth quarter, while The second reading of the same price-measured index may show the stability of growth at 1.3%, little changed from the first reading and the previous reading for the previous quarter.

This comes in conjunction with the disclosure of the reading of the durable goods orders index, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product in the United States of America, which may reflect the widening of the decline to 19.0% compared to 14.7% last March, as may appear The substantial reading of the same index extended the decline to 14.8% compared to 0.4% in March.

This also comes in conjunction with the issuance of the aid claims index for the past week on May 22, which may reflect a decline of 338 thousand applications to 2,100 thousand applications compared to 2,438 thousand requests in the previous reading, while the reading of the continuing benefit requests for the past week may appear in 15 From this month, an increase of 677 thousand requests to 25,750 thousand requests compared to 25,073 thousand requests.

This comes before we witness the disclosure of housing market data with the release of existing home sales, which may show a decline in decline to 15.0% compared to 20.8% in March, leading to the participation of FOMC members and New York Fed Chairman John Williams in a hypothetical discussion. At Stony Brook University Business School on Long Island.

Otherwise, yesterday we followed up and told US Secretary of State Mike Pompeo the US Congress that Hong Kong was no longer independent from China, which raised questions about favorable trade relations for the Special Administrative Region with the United States of America, and added to concerns about Washington's possible economic sanctions against Chinese officials. This comes in the wake of the Chinese parliament passing the new National Security Law that sparked protests in Hong Kong.

We also followed yesterday, Wednesday, the US House of Representatives passing legislation condemning China to arrest and torture Uighur Muslims in the Xinjiang region of western China, and it is reported that US President Donald Trump expressed Tuesday that he will announce his administration's response to China’s actions by the end of the week, and Washington is currently considering imposing sanctions on officials The Chinese Treasury can impose transaction controls and freeze the assets of Chinese officials and companies.

Technical analysis

The price of gold shows noticeable positive trading after approaching our awaited target at 1691.10 in the previous sessions, heading towards a possible test of the resistance of the descending intraday channel that appears in the image, which is now at 1729.30, so that the bullish bias is likely during the upcoming sessions, with the need to monitor the price behavior upon arrival The mentioned level, as its breach represents the key of resuming the main bullish trend and stopping the down corrective wave.

On the other hand, it should be noted that a break of 1691.10 will stop the suggested rally and put the price under more negative pressure targeting 1646.00 level as a next corrective station.

The expected trading range for today is between 1700.00 support and 1730.00 resistance.

Expected trend for today: bullish.