Gold analysis 11.06.2020

Gold prices fluctuated in a narrow range tilted towards the decline during the Asian session to witness its rebound from above since June 2 amid the US dollar index rebound to the second session from the lowest since March 10 according to the inverse relationship between them on the threshold of developments and economic data expected today Thursday by the US economy the largest economy in the world and in the aftermath of the expiry of the Federal Open Market Committee meeting, which charted a long way to repair the economic damage caused by the outbreak of the Coronavirus.

At exactly 04:22 am GMT, gold futures contracts for next August delivery fell 0.30% to trade at $ 1,741.30 per ounce compared to the opening at $ 1,746.60 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded trading yesterday at $ 1,720.70 an ounce, with the rising US dollar index 0.19% to 96.28 compared Balavtaatahih at 96.10.

Investors are currently awaiting by the US economy the issuance of the index of subsidy requests for the last week on the fifth of this month, which may reflect a decline of 327 thousand requests to 1,550 thousand requests compared to 1,877 thousand requests in the previous reading, as may appear reading the continuing subsidy requests for the past week in May 29, down by 1,487 thousand requests to 20,00 thousand requests compared to 21,487 thousand requests.

This comes in conjunction with the release of the producer price index, which is an initial indicator of inflation, which may reflect 0.1% growth versus a 1.3% contraction last April, while a substantial reading of the same indicator may show contraction shrinking to 0.1% versus 0.3%, and the annual reading may appear The index has the contraction stable at 1.2%, little changed from the previous annual reading, while the substantial annual reading may reflect the slowdown in growth to 0.4% compared to 0.6%.

Other than that, yesterday we followed the expiry of the two-day FOMC meeting, during which the Federal Reserve monetary policymakers kept the interest on federal funds at between zero and 0.25% for the second meeting in a row, which came in line with expectations And, with the disclosure of the expectations of the members of the Committee to the rates of growth, inflation, and unemployment in addition to the future interest rates for the next three years.

This included the expectations of the members of the federal stay interest rates at levels of zero until 2022 and that the US economy could shrink 6.5% in 2020 and that the unemployment rate could reach 9.3% by the end of the year before falling to 6.5% in 2021 to 5.5% in 2022, and came Hours after the CPI reading showed inflation in the third consecutive month in May to reflect the longest deflation period ever.

As we followed on Wednesday the press conference held by the Governor of the Federal Reserve Bank of Jerome Powell to comment on the decisions of the Federal Commission, which confirmed through the reserve commitment of the federal using all the tools to support the US economy in light of the current challenges to achieve the goal of inflation and price stability and access to the optimal exploitation of the labor market, explaining Coronavirus that caused extensive damage and economic health in America and beyond.

He noted Powell, the fact that the coronavirus and procedures that have been adopted to limit its spread, specifically the closure of economies, have had a negative impact on economic activity led to high unemployment, while referring to the fact that the weakness of domestic demand and the decline in oil prices has a negative impact on inflation, adding that the continuation of the current crisis would hurt economic activity More employment, in addition to inflation in the short term, will reflect negatively on the economic outlook for the medium term.

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.

Expected trading range for today is between the support and resistance 1700.00 1740.00.

Expected trend for today: bullish.