Gold analysis 10.06.2020

Gold prices fluctuated in a narrow range tilted to the upside, to witness its bounce for the fourth session from the lowest since April 21, amid the decline of the US dollar index according to the inverse relationship between them after the developments and economic data that were followed by the Chinese economy, the largest consumer of metals globally and on the cusp of developments and economic data expected today, Wednesday, by the US economy, the largest economy in the world, which includes the events of the Federal Open Market Committee meeting and the upcoming press conference of Federal Reserve Governor Jerome Powell.

At exactly 03:49 am GMT, gold futures contracts for next August delivery rose 0.32% to trade at $ 1,724.40 per ounce compared to the opening at $ 1,718.90 per ounce, knowing that the contracts started the trading session on a falling price gap after it concluded trading Yesterday at $ 1,721.90 an ounce, with the US dollar index down 0.14% to 96.31 compared to the opening at 96.45.

We have followed the disclosure of the Chinese National Bureau of Statistics of inflation data with the release of the annual reading of the consumer price index, which showed a slowdown in the pace of growth to 2.4% compared to 3.3% last April, without expectations at 2.7%, as for the annual reading of the producer price index, which An initial indication of inflationary pressures was that the deflation widened to 3.7% versus 3.1%, also worse than expectations for a 3.2% contraction.

On the other hand, investors are anticipating the US economy to disclose inflation data with the release of the CPI reading that may show stability at zero levels versus a 0.8% contraction in April, as the fundamental reading of the index may show stability at zero levels versus a 0.4% contraction , And the annual reading of the index may reflect the slowdown in growth to 0.2% versus 0.3%, as the substantial annual reading may show 1.3% versus 1.4%.

This comes in conjunction with the actual meeting of the Federal Committee for the Open Market via satellite in Washington, which is expected to remain on the short-term reference interest rates for the second meeting at between zero and 0.25%, in conjunction with the disclosure of the Federal Committee data and the expectations of the members of the Committee for growth rates Inflation and unemployment as well as the future of interest rates for the next three years.

Up to the press conference to be held by Federal Reserve Governor Jerome Powell half an hour after the FOMC meeting ended to comment on the decisions of the Federal Reserve monetary policy makers who recently adopted several stimulus programs until the economy showed signs of recovery, led by the Treasury bond purchase program At $ 500 billion a month and mortgage bonds at least $ 200 a month.

Technical analysis

The price of gold maintains its stability above SMA 50, awaiting further increase during the upcoming sessions, noting that the price needs a positive momentum sufficient to push trades towards our first positive target, which is located at 1764.00.

In general, we continue to favor the bullish trend over the intraday and short term, provided stability above 1691.10, as breaking this level will press the price to make more bearish correction and heading towards 1646.00 before any new attempt to rise.

The expected trading range for today is between 1700.00 support and 1740.00 resistance

Expected trend for today: bullish