Gold analysis 09.06.2020

Gold prices fluctuated in a narrow range tilted towards the decline during the Asian session, with the US dollar index resuming its rebound from the lowest since 12 March for the second session in three sessions according to the inverse relationship between them on the cusp of developments and economic data expected today Tuesday by the American economy, the largest economy In the world, which includes launching the activities of the Federal Open Market Committee meeting today and tomorrow, Wednesday.

At exactly 03:51 AM GMT, gold futures contracts for next August delivery fell 0.12% to trade at $ 1,701.90 per ounce compared to the opening at $ 1,703.90 per ounce, knowing that the contracts started the session’s trading on a falling price gap after it concluded trading Yesterday at $ 1,705.10 an ounce, with the US dollar index rising 0.09% to 96.72 compared to the opening at 96.63.

Investors are currently awaiting by the American economy the release of the final reading of the wholesale stocks index, which may confirm an increase of 0.4%, unchanged from the previous initial reading for the month of April, and against a decline of 0.8% last March, in conjunction with the disclosure of labor market data with A reading of the job opportunities and employment turnover figures, which may reflect a decrease to 5.75 million, compared to 6.19 million in March.

Other than that, the markets are looking at a later time for the launching of the FOMC meeting that takes place today and tomorrow Wednesday via satellite in Washington, which is expected to keep the short-term benchmark interest rates for the second meeting at between zero and 0.25% in conjunction With the disclosure of the expectations of members of the Committee to the rates of growth, inflation, and unemployment in addition to the future interest rates for the next three years.

Up to the press conference that Federal Reserve Governor Jerome Powell will hold tomorrow, specifically, half an hour after the FOMC meeting ends, to comment on the decisions of the Federal Committee, which recently adopted many stimulus programs until the economy showed signs of recovery, led by the Treasury bond purchase program at $ 500 One billion monthly and mortgage bonds, at least $ 200 a month.

On the other hand, we followed this weekend the World Bank revealed its forecasts for the global economy 2020, which included the contraction of the global economy 5.2% in 2020 due to the Coronavirus compared to previous expectations of growth of 2.5%, with the indication that the global economic recession will be the largest since 1945 in the wake of World War II, depending on the per capita gross domestic product.

The World Bank’s forecast also included that the major economies may shrink 7% in 2020, amid expectations that the US economy will shrink 6.1%, the Japanese economy 6.1%, and the eurozone economies 9.1% during this year, but it may recover next year 2021 and achieve 3.9% growth, and the bank favored the province of China On a positive growth of 1% this year, while the Indian economy may shrink 3.2% in 2020 and the Brazilian economy shrink 8% this year.

Technical analysis

Gold price confirmed the breach of the level of 1691.10 after ending yesterday's trading above it, to reactivate the bullish trend scenario in the intraday and short term, on its way to achieving positive goals that start at 1764.00.

Thus, the bullish trend will be likely for today, and the price needs to breach the 1710.00 level to facilitate the task of heading towards the expected targets, taking into consideration that breaking the level of 1691.10 will stop the expected rise and press the price to test the pivotal support 1670.80 initially.

The expected trading range for today is between 1680.00 support and 1725.00 resistance.

Expected trend for today: bullish.