Gold analysis 21.07.2020

Gold price futures fluctuated in a narrow range tilted to the upside during the Asian session amid the decline in the US dollar index to its lowest level since the tenth of last March, according to the inverse relationship between them after European Union leaders reached an agreement on a virus recovery fund worth 750 billion euros today, Tuesday. Amid the scarcity of economic data at the beginning of this week by the American economy, the largest economy in the world, and with optimism about the positive results on a vaccine for Coronavirus.

At exactly 03:52 AM GMT, gold futures contracts for next August delivery rose 0.05% to trade at $ 1,820.60 per ounce compared to the opening at $ 1,819.60 per ounce, knowing that the contracts started the trading session on an upward price gap after it concluded trades Yesterday at $ 1,817.40 an ounce, with the US dollar index down 0.06% to 95.68 compared to the opening at 95.74.

We have followed, after four days of violent negotiations, European Union leaders reached an agreement on a historic stimulus package to be witnessed by the euro area with the 27 member states unanimously agreeing to issue 750 billion euros ($ 860 billion) in joint debt bonds to help member states within the union reduce the decline The economist, as the emergency fund will provide 390 billion euros in loans and low interest loans of 360 billion euros.

We would like to point out that the agreement of the EU leaders during the European Union economic summit in Brussels for the first time since the outbreak of the Coronavirus, which dealt with the discussion of the European Union’s long-term budget and ways to recover from the negative repercussions of the outbreak of the Coronavirus, represents a victory for German Chancellor Angela Merkel and French President Emmanuel Macron who coined An early proposal for the proposal was made last May.

In the same context, a senior Italian official stated that Italy, the third largest economy in the euro area and the original European center of the epidemic, will likely be the biggest beneficiaries of the plan and that it is expected to obtain grants from the European Emergency Fund worth 82 billion euros and low-interest loans of 127 billion euros According to preliminary estimates, according to Bloomberg News.

On the other hand, we have recently followed up the World Gold Council’s disclosure of its semi-annual periodic report, which stated that the funds traded for gold recorded during the seventh monthly increase in cash flow in June, adding 104 cubic tons of gold, equivalent to $ 5.6 billion or 2.7 % Of assets under management and that global net flows during the first half of 2020 amounted to $ 39.5 billion, outperforming the record increase in 2016.

In the same context, World Gold Council President Joan Carlos Artigas noted that "gold investment funds penetrated several record levels of this world, with investors seeking a safe haven from the economic downturn that created the Coronavirus" adding "to put the current flows in context during the first half of 2020, The flows of gold funds have strongly exceeded the central banks ’purchases of gold during 2018/2019.

Technical analysis

Gold price trading stabilizes inside the bullish intraday channel that appears in the image, and the breach of the resistance of the bullish flag indicated in our recent reports, which supports the expectations of the continuation of the bullish trend in the intraday and short term, which gets continuous support from the moving average 50, is awaiting the visit of the 1870.00 level as the main station. deification.

On the other hand, it should be noted that the continuation of the suggested bullish wave requires stability above 1795.00 level.

The expected trading range for today is between 1800.00 support and 1850.00 resistance.

Expected trend for today: bullish.