Gold Analysis 16-06-2020

Gold prices fluctuated in a narrow range tilted to the upside during the Asian session amid the negative stability of the US dollar index according to the inverse relationship between them after the disclosure of the minutes of the Reserve Bank of Australia meeting and the decisions and directions of the Bank of Japan and on the cusp of developments and economic data expected today Tuesday by the US economy, which includes the half-certificate Federal Reserve Governor Jerome Powell annualizes before the US Congress about monetary policy and in light of renewed market fears of a second wave of corona virus.
 
At exactly 05:14 am GMT, gold futures contracts for next August delivery rose 0.08% to trade at $ 1,733.70 per ounce compared to the opening at $ 1,732.30 per ounce, knowing that the contracts started the session’s trading on an upward price gap after it concluded trading Yesterday at $ 1,727.20 an ounce, with the US dollar index down 0.04% to 96.53 compared to the opening at 95.57.
 
This has been followed by the Australian economy, the Reserve Bank of Australia revealed the minutes of its last meeting, which was held on the second of this month, during which the monetary policy makers at the Australian Central Bank approved fixing short-term benchmarks for the third consecutive meeting at the lowest ever at 0.25%. Which came in line with expectations at the time.
 
The minutes stated that the Australian central bank stated that "the significant, coordinated and unprecedented easing of fiscal and monetary policy in Australia was helping the economy during this difficult period" and that "it is likely that this financial and monetary support will be required for some time" while emphasizing that it will not provide for an increase in interest until it is shown The economy has progressed towards full employment and the target of inflation sustainably and is ready to increase its bond purchases.
 
This came before we witnessed the decision of the monetary policy makers at the Japanese Central Bank in the meeting of June 16, which was held for one day as a precautionary measure against the spread of the Corona virus, to keep the short-term reference interest rates negative at 0.10%, which came in line with expectations. , While also remaining committed to directing the 10-year government bond yield to zero.
 
The Bank of Japan disclosed the monetary policy statement through which monetary policy makers touched on the fact that the uncertainty is very high regarding the impact of the Corona virus on the economy amid the statement that the economy faces a difficult challenge and that private consumption has declined extensively, with the assurance that they will take additional steps to facilitate cash without Hesitate if necessary and focus on the effects caused by the coronavirus.
 
It is noteworthy that the Japanese central bank adopted in the previous emergency meeting on the 22nd of last May, more stimulus with the launch of a new lending program in which it aims to direct more money to small and medium-sized companies that suffer from the economic blow to the spread of the coronary virus epidemic, while also benefiting it. At the time, he had extended the deadline for a series of recent actions he had taken to combat the consequences of the Coronavirus.
 
The Bank of Japan also announced last month to accelerate purchases of corporate debt of six months to the end of the current fiscal year on March 31, 2021, and this comes in the wake of the Bank of Japan raising at the meeting in April last, the maximum purchase of corporate bonds and securities Trade, which he pledges to buy to 20 trillion yen from 7 trillion yen previously.
 
We would like to point out, as the BoJ also confirmed in April its commitment to purchase unlimited amounts of government bonds by canceling the previous directive to purchase them at an annual rate of about 80 trillion yen, as the monetary policy statement at the time included a paragraph “The Bank of Japan will purchase the necessary amounts Of government bonds without setting a ceiling, so that the return on 10-year bonds remains at about zero percent. "
 
On the other hand, investors are currently awaiting by the US economy the disclosure of the retail sales reading, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product of the United States, which may reflect a rise of 7.9% against the worst ever, a decline of 16.4% last April. Also, the substantial reading of the same index may show an increase of 5.5% compared to the worst ever, a decline of 17.2%.
 
This comes in conjunction with the disclosure of industrial sector data for the largest industrialized country in the world with the release of the industrial production index, which may reflect an increase of 3.0% compared to 11.2% in April, while a reading of the energy utilization index may show an acceleration of growth to 66.8% compared to 64.9% in April, before we witnessed the release of the final reading of the wholesale stocks index, which may show the widening decline to 0.8% compared to 0.2% last March.
 
To the testimony of Federal Reserve Governor Jerome Powell about the semi-annual report of the Federal Reserve monetary policy before the Senate Banking Committee via satellite, before we witness the speech of the Deputy Governor of the Federal Reserve and member of the Federal Open Market Committee Richard Clarida about economic expectations and monetary policy at the annual dinner of the Assembly Foreign policy in Washington is also via satellite.
Other than that, we followed this week's report that touched upon the fact that the administration of President Donald Trump was considering stimulus plans worth $ 2 trillion to spend on infrastructure in the United States, and that came before we saw the Federal Reserve announcing the detailed plans to purchase individual corporate bonds This stimulated investor appetite for risk in the financial markets by supporting US monetary and fiscal stimulus plans.
 

Technical analysis

  
Gold price trading rebounded strongly after approaching the $ 1700.00 barrier, to keep the main bullish scenario scenario effective, and the price begins new attempts to breach the resistance line that appears in the picture, waiting for more rise to visit the level of 1765.00, which represents our next major station.
 
Thus, we will continue to favor the bullish trend for the upcoming period, noting that the continuation of the bullish main wave requires stability above 1691.90 level.
 
The expected trading range for today is between 1710.00 support and 1760.00 resistance
 
Expected trend for today: bullish