Gold analysis 04.06.2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session, disregarding the US dollar index rebound for the second session from the lowest since March 12, according to the inverse relationship between them on the threshold of developments and economic data expected today Thursday by the economies of the euro area and the US economy the largest economy In the world, in the shadows and pricing of investors, to reopen global economies in exchange for the continuing escalation of tensions between Washington and Beijing, and the widespread protests in the United States.

At exactly 04:13 AM GMT, gold price futures for next August delivery rose 0.14% to trade at $ 1,705.20 an ounce compared to the opening at $ 1,702.80 per ounce, knowing that the contracts started the session’s trading on a falling price gap after it concluded trading Yesterday at $ 1,704.80 an ounce, while the US dollar index rose 0.14% to 97.46 compared to the opening at 97.31.

The markets are looking to the eurozone economies as a whole to reveal the retail sales index reading, which may reflect the widening decline to 15.0% compared to 11.2% last March, as the annual reading of the same indicator may show the expansion of the decline to 22.3% compared to 9.2% in the reading Previous annual for the month of March. This may reflect the largest decline since the inception of the European Union in early 1999.

This comes before we witness the ECB’s actual activities amid expectations that the interest rates will remain at their zero levels and that the marginal lending rate should be fixed at 0.25%, in addition to keeping the interest rate on negative deposits -0.50%. It is also expected that the meeting will increase the size of the emergency bond purchase package. (PEPP) rose by 500 billion euros to 1.25 trillion euros, before the press conference of the European Central Governorate Christine Lagarde.

This comes hours after German Chancellor Angela Merkel's alliance approved a comprehensive stimulus package of 130 billion euros designed to stimulate short-term investor spending and corporate investments in the largest economies of the eurozone, as we followed yesterday by German Foreign Minister Heiko Maas to lift his country the travel ban for member states In the European Union, starting from June 15, this came within the framework of reopening world economies.

.

On the other hand, investors are currently awaiting by the American economy the issuance of the index of subsidy requests for the past week on May 29, which may reflect a decline of 330 thousand requests to 1,820 thousand requests compared to 2,123 thousand requests in the previous reading, as may appear reading requests The ongoing benefit for the last week on the 22 of this month decreased by 1,002 thousand requests to 20,050 thousand applications compared to 21,052 thousand requests.

This comes in conjunction with the release of the merchandise trade balance reading, which may explain the deficit shrinking to $ 41.5 billion compared to $ 44.4 billion in April, and with the disclosure of the final reading of the productivity index and the cost of one work, and amid expectations that productivity shrinkage will remain at 2.5% and stability of the cost of one work At 4.8% unchanged from the first reading for the first quarter, compared to productivity growth of 1.2% and growth in the cost of one work 0.9% in the fourth quarter.

Technical analysis

The gold price tested the level of 1691.10 and bounced up significantly from there, to head towards resuming the main bullish trend, supported by the positive signal provided by the stochastic indicator now, pending achieving a further rise to visit the recently recorded summit at 1764.00 as a first positive target.

Thus, the bullish trend scenario will remain valid and active for the upcoming period, noting that breaching 1691.10 will press the price to make more bearish correction and head towards 1646.00 as a next corrective station.

The expected trading range for today is between 1690.00 support and 1750.00 resistance.

Expected trend for today: bullish.