Gold analysis 20.07.2020

Gold prices fluctuated in a narrow range tilted towards the decline during the Asian session, to watch its bounce for the fourth session within nine sessions from its highest since September 19, 2011, while the dollar index resumed its bounce from the lowest since June 10, when it tested the lowest since the tenth From March for the second session in four sessions according to the inverse relationship between them.

 After the economic developments and data that we followed about the largest economies in Asia, and amid the scarcity of economic data today, Monday, by the US economy, the largest economy in the world.

At exactly 04:21 am GMT, gold futures contracts for next August delivery fell 0.18% to trade at $ 1,809.00 per ounce compared to the opening at $ 1,812.30 per ounce, knowing that the contracts started the session’s trading on an upward price gap after it concluded trading Last week, at $ 1,810.00 an ounce, with the US dollar index rising 0.08% to 96.14 compared to the opening at 96.06.

We have followed the Japanese economy, the second largest economy in Asia and the third largest economy in the world. The reading of the trade balance showed that the deficit narrowed to 269 billion yen compared to 833 billion yen last May, contrary to expectations that the deficit would shrink to 36 billion yen, as I explained. A seasonally adjusted reading of the same index reduced the deficit to 424 billion yen from 586 billion yen, also worse than expectations that indicated the deficit narrowed to 302 billion yen.

This came with the annual reading of Japanese exports showing that the decline decreased to 26.2% compared to 28.3% in May, worse than expectations that indicated a decrease in the decline to 24.9%, as the annual reading of imports showed that the decline decreased to 14.4% compared to 26.2%, exceeding expectations that She pointed to a decrease in the decline to 16.8%, and we would like to point out, because the decline in exports last month was due to the decline in exports of cars, which represent a large part of Japanese exports.

In another context, we have also followed the Bank of Japan disclosure of the minutes of its last meeting held on July 15, during which monetary policymakers at the Bank of Japan decided to keep interest rates negative at 0.10%, while also remaining committed to directing government bond yields. With a 10-year period at zero and the assurance that additional steps will be taken to facilitate the cash without hesitation if necessary.

The minutes of the Japanese central meeting included a warning that the risks to the economy are in a declining direction, and it is reported that the Bank of Japan revealed on Wednesday the monetary policy statement and its quarterly expectations that touched on the fact that the economy may shrink 4.7% during the fiscal year 2020, and that it may witness an expansion of 3.3% in the fiscal year 2021 and 1.5% in 2022 and that the huge may shrink 0.5% in the fiscal year 2020 before expanding 0.3% in 2021 and 0.7% in 2022.

Technical analysis

The gold price is making attempts to overcome the resistance of the descending sub-channel that represents a bullish continuation flag pattern, to obtain a positive incentive that contributes to pushing the price to resume the main bullish trend and return to the bullish intraday channel that appears in the picture, waiting for the direction to achieve our main positive objective that reaches 1870.00.

SMA 50 continues to support the price from below, to continue to favor the bullish trend for the next period, noting the importance of stability above 1790.00 for the continuation of the suggested bullish wave.

The expected trading range for today is between 1795.00 support and 1840.00 resistance.

Expected trend for today: bullish.