Gold analysis 08.06.2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session, disregarding the dollar index rebound for the second consecutive session from the lowest since March 12, according to the inverse relationship between them after the developments and economic data that we followed yesterday from the Chinese economy, the largest consumer of metals globally and the economy The Japanese is the second largest economy in Asia and amid the scarcity of economic data on the US economy at the beginning of this week, which carries the meeting of the Federal Open Market Committee.

At exactly 04:19 AM GMT, gold futures contracts for next August delivery rose 0.35% to trade at $ 1,692.60 per ounce compared to the opening at $ 1,686.70 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded trading Last week at $ 1,683.00 an ounce, while the US dollar index rose 0.05% to 96.89 compared to the opening at 96.84.

This was followed yesterday by the Chinese economy, the largest economy in Asia and the second largest in the world, by the release of the Trade Balance Index reading, which showed the widening of the surplus to 443 billion yuan, equivalent to $ 62.9 billion, compared to a surplus of 318 billion yuan, equivalent to $ 45.3 billion in April. In the past, contrary to expectations that the surplus will shrink to 283 billion yuan, equivalent to $ 41.4 billion, with shrinking exports and widening imports.

This came before we witnessed about the Japanese economy, the third largest economy in the world and the third largest industrialized country globally earlier this week, the disclosure of growth data for the first quarter with the release of the seasonally adjusted final reading of GDP, which showed a contraction of 0.6% compared to a contraction of 0.9% in the previous initial reading For the first quarter and against a contraction of 1.8% in the previous reading for the fourth quarter, worse than expectations for a contraction of 0.5%.

In the same context, the annual final reading of the GDP measured by prices showed a growth of 0.9% unchanged from the previous annual reading of the previous quarter in line with expectations and against a growth of 1.2% in the fourth quarter, and this came in conjunction with and this came in conjunction with the issuance of the annual reading of the bank lending index Which reflected the acceleration of growth to 4.8% compared to the previous reading for the month of March.

We also followed the release of the current account index reading, which showed a surplus shrinkage to 0.26 trillion yen, compared to 1.97 trillion yen last March, worse than expectations that indicated a shrinkage of the surplus to 0.48 trillion yen, just as the seasonally adjusted reading of the same indicator showed that the surplus has shrunk to what The value of 0.25 billion yen compared to 0.94 billion yen in March, also worse than expectations that indicated the surplus to shrink to 0.33 billion yen.

Other than that, we followed Friday, the US Department of Labor data showed the addition of the world's largest economy 2.5 million jobs in May, which is a record and contrary to expectations losing nearly 8 million jobs, which contributed to the decline in unemployment rates in America to 13.3% compared to 14.7% in April April, which reinforced market optimism that the worst is over in conjunction with the continued easing of power worldwide by authorities by closing down the virus pandemic.

Technical analysis

The gold price achieved a strong breakout of the level of 1691.10 and ended the trading last week without it, to fall under the expected negative corrective pressure, supported by the moving average 50, but we note that the price was based on a horizontal support floor located at 1670.80, to bounce up and approach the test of 1691.10 that turns into resistance now, It is supported by the positive signal provided by the stochastic indicator, to provide signals of an attempt to restore the main bullish trend again.

Consequently, this conflict between technical factors makes us prefer stopping rather than neutral until we get a clearer signal for the next direction, noting that breaking the 1670.80 level will put the price under more negative pressure to head towards testing the 1646.00 level as a next corrective target, while a breach of 1691.10 represents Restore the bullish trend and head towards positive targets starting at 1764.00.

The expected trading range for today is between 1670.00 support and 1720.00 resistance.

Expected trend for today: neutral.