Gold Analysis 03-07-2020

Gold price futures fluctuated in a narrow range that tilted back down during the Asian session to witness its bounce for the second session in three sessions from its highest since September 21, 2011 amid the US dollar index rebound to the second session from the lowest since 24 of June according to the reverse relationship Between them following the economic developments and data that we adopted today, Friday, from the Chinese economy, the largest consumer of metals globally, and amid the scarcity of economic data in the last sessions by the American economy due to the Independence Day holiday in the United States.

At exactly 04:31 AM GMT, gold price futures for next August delivery fell 0.07% to trade at $ 1,786.60 per ounce compared to the opening at $ 1,787.90 per ounce, knowing that the contracts started the session’s trading on a falling price gap after it concluded trading Yesterday at $ 1,790.00 an ounce, with the US dollar index rising 0.01% to 97.23 compared to the opening at 97.22.

We have followed the disclosure of the Caixin Services PMI reading by Markit about China, which indicated an expansion to 58.4 to reflect the fastest pace of growth in a decade, compared to 55.0 last May, contrary to expectations that the expansion of the expansion to 53.8, which boosted optimism about the prospects for economic recovery from the repercussions of the Corona pandemic.

This comes hours after the US labor market data for the month of June showed that unemployment fell to 11.1% compared to 13.3% in May, outperforming expectations that it fell to 12.4%, with a reading of the employment change index for sectors except Agri created 4,800,000 jobs compared to 2,699,000 added jobs in May, beating expectations for 3,037,000.

In the same vein, yesterday's average hourly earnings index showed that the decline expanded to 1.2% compared to 1.0% in May, contrary to expectations that the decline will decrease to 0.8%. This came in conjunction with the reading of the claims requests index for the week that passed on the 26th of June, declining by 55 thousand applications to 1,427 thousand applications compared to 1,482 thousand applications in the previous reading.

This comes hours after the Federal Reserve revealed last Wednesday the minutes of the Federal Open Market Committee meeting held on 9-10 June, during which interest rates were fixed at zero levels between zero and 0.25%, which came in line with expectations At that time, with the disclosure at the time of the members ’expectations of the rates of growth, inflation and unemployment, in addition to the future of interest rates for the next three years.

Technical analysis

The gold price continues to move around the support of the bullish intraday channel, and obtains continuous positive support from the EMA50, awaiting obtaining a positive momentum enough to push the price to resume the bullish main wave, which targets the levels of 1800.00 then 1850.00.

Thus, we will maintain our bullish expectations, provided that the price maintains its stability above 1770.00 levels and most importantly above 1750.00.

The expected trading range for today is between 1760.00 support and 1800.00 resistance

Expected trend for today: bullish