Gold analysis 03.06.2020

Gold prices fluctuated in a narrow range tilted towards the decline during the Asian session, to witness its bounce for the third session from the top since May 18, disregarding the decline in the US dollar index to its lowest since March 13, according to the inverse relationship between them on the cusp of developments and economic data expected today Wednesday by the US economy, the world's largest economy, and in the shadows and pricing of investors to reopen global economies in exchange for tensions between Washington and Beijing, and the protests in the United States.

At exactly 03:32 am GMT, gold futures contracts for next August delivery fell 0.13% to trade at $ 1,731.50 an ounce compared to the opening at $ 1,733.70 per ounce, knowing that the contracts started the session’s trading on a falling price gap after it concluded trading Yesterday at $ 1,734.00 an ounce, while the US dollar index fell 0.11% to 97.46 compared to the opening at 97.57.

Investors are currently awaiting by the US economy the disclosure of preliminary data for the labor market with the release of the index of change in private sector jobs, which may reflect the loss of 9,000 thousand jobs compared to the loss of 20,236 thousand jobs last April, and this comes hours before the disclosure after tomorrow, Friday On the monthly report of jobs except agricultural and unemployment rates in addition to the hourly rate for the month of May.

This comes before we witness the final reading of the Markit Service Supply Institute index by Markit for the United States, which may reflect a contraction of shrinkage to 37.2 compared to a value of 36.9 in the initial reading for the last month and against a contraction at 26.7 in April, and before the disclosure of the index reading Factory orders, which may show a widening decline to 13.7% compared to 10.3 last March.

To reveal the reading of the Institute for Service Supply index that is important in that the service sector represents more than two-thirds of the gross domestic product of the United States, which may explain the contraction shrinkage to 44.2 compared to 41.8 in April, otherwise, according to the latest figures issued by The World Health Organization has increased the number of cases infected with the Coronavirus by more than 6.19 million, and 376,320 people have died in 216 countries.

In another context, the markets assessed the possibilities of the US military deploying in the United States to suppress the strikes and violent demonstrations in the cities over the killing of George Floyd of African descent at the hands of the American police, after the curfew failed to contain the massive protests that included violence and looting with the demonstrators taking to the streets after weeks Closings during the Corona pandemic, which caused millions to lose their jobs.

It is worth noting that these extended strikes taking place in America have reinforced concern about the coronary virus outbreak more broadly among these human groupings and restored concerns about the chances of recovery for the economy that is just emerging from the Great Depression in the thirties of the last century, and Trump on Monday criticized the deans of the states American, while describing them as weak and that they must take more stringent measures in dealing with the protests.

Technical analysis

The price of gold made negative trades yesterday to approach the pivotal support 1719.00, and fluctuates around the EMA50 now, noting that the stochastic indicator has rid of its negative momentum and reaches the oversold areas in the sale, waiting for the price to be stimulated to resume the expected bullish trend for the next period, which targets a level 1764.00 tentatively.

Thus, the bullish trend scenario will remain valid and active for today, noting that breaching 1719.00 will push the price to test the most important support at 1691.10 before any new positive attempt.

The expected trading range for today is between 1715.00 support and 1760.00 resistance.

Expected trend for today: bullish.