Gold analysis 01.06.2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session to witness the highest since May 18, when it experienced the highest since April 14 and reversed the highest in eight years, with the decline in the US dollar index according to the inverse relationship between them after The economic developments and data that were followed by the Chinese economy, the second largest economy in the world, and on the cusp of developments and economic data expected on Monday by the US economy, the largest economy in the world.

At exactly 03:52 AM GMT, gold price futures for next August delivery rose 0.13% to trade at $ 1,752.00 per ounce compared to the opening at $ 1,749.80 per ounce, knowing that the contracts started the trading session on a falling price gap after it concluded trading The first half of this year at $ 1,751.70 an ounce, with the US dollar index down 0.21% to 98.02 compared to the opening at 98.23.

We have followed a short while ago, the China Federation of Logistics and Procurement (CFLP) revealed the readings of the industrial and service purchasing managers' index for the past month, which indicated that the industrial sector shrank to 50.6 compared to 50.8 last April, contrary to expectations that it expanded to 51.1, while the expansion of The service sector rose to 53.6 compared to 53.2 in April, beating expectations for a expansion of 53.5.

On the other hand, markets are looking to reveal the final reading of the manufacturing PMI by Markit for the United States, which may reflect the stability of the contraction at $ 39.8, little changed from the initial reading of last month and compared to the contraction at 36.1 in April, before we witness By the US economy, the construction spending index showed a 6.5% decline compared to a 0.9% rise in March.

This comes in conjunction with the disclosure also by the largest industrialized country in the world about the reading of the Institute of Industrial Supply index, which may show contraction shrinkage to 43.5 compared to 41.5 in April, as the reading of the Institute of Industrial Supply measured in prices may indicate shrinkage of deflation to its value 40.0 vs. 35.3, and we would like to point out, because the reading issuance at a value of 50 or higher reflects amplitude, while its issuance less than 50 indicates contraction.

Otherwise, during the past weekend, we followed violent protests taking place in some cities in the United States with the curfew failing to stop confrontations between activists and law enforcement forces, as protesters took to the streets after weeks of closures during the Coronavirus pandemic, which caused the loss of millions For their jobs and especially heavier on minority communities in America.

Technical analysis

Gold price trading stabilizes above the breached resistance of the descending channel and gets positive support from the EMA50, to support our expectations of achieving more gains in the intraday basis, waiting for the test of the recently recorded summit at 1764.00 as the first station, noting that a breach of this level is required to confirm the continuation of the trend The bullish main, whose next target is at 1810.00.

From here, we continue to favor the bullish trend for the upcoming period, noting that a break of 1719.00 will stop the expected rise and press the price to test the level of 1691.00 again before any new attempt to rise.

The expected trading range for today is between 1720.00 support and 1764.00 resistance.

Expected trend for today: bullish.