Gold analysis 06.08.2020

Futures contracts for gold prices fluctuated in a narrow range slanting to an upward trend during the Asian session to witness stability near its highest ever, with the US dollar index rebounding for the fourth session from its highest since July 28, according to the inverse relationship between them before the developments and the expected economic data on Thursday from The American economy was before the largest in the world.

This comes amid investor pricing for the division of US lawmakers over the virus relief package talks and in light of concern over a second wave of Corona virus outbreak and the threat of the White House to act on its own if it fails to reach an agreement with Democrats, in addition to the escalation of tensions between the United States and China, the world's largest consumer of the mineral.

At exactly 03:58 am GMT, the futures contract for gold prices for next December delivery rose 0.05% to trade at $ 2,056.10 per ounce compared to the opening at $ 2,055.00 per ounce, knowing that the contracts started trading on a rising price gap after it was concluded Yesterday's trading at $ 2,049.30 per ounce, with the US dollar index declining 0.02% to 92.76 compared to the opening at 92.78.

Investors are currently awaiting the American economy to see the release of the aid claims index reading for last week at the beginning of August, which may reflect a decrease of 24 thousand requests to 1,410 thousand applications compared to 1,434 thousand applications in the previous reading. From July 25, a decrease of 298,000 applications to 16,720,000, compared to 17,018,000 applications in the previous reading.

This comes, before we witness the participation of a member of the Federal Open Market Committee and Chairman of the Dallas Federal Reserve, Robert Kaplan, in a panel discussion entitled "Economic Recovery and Challenges in the United States" in a hypothetical event hosted by the Official Forum of Monetary and Financial Institutions, as the markets look forward to what will be the outcome of the talks. US lawmakers about the virus relief package anticipated by Congress.

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

Technical analysis

Gold price stabilizes around 2040.00 after the rises it witnessed yesterday, and continues to move inside the bullish channel that appears in the image, which is supported by the EMA50, waiting for more upside during the next sessions to visit 2078.00, which represents our next main target.

Consequently, we expect the bullish bias to continue in the intraday and short term, bearing in mind that breaking 1990.00 will stop the suggested ascend and pressure the price to start a downward corrective wave.

The expected trading range for today is between 2010.00 support and 2075.00 resistance

The expected general trend for today: Bullish