Gold analysis 11.08.2020

Futures contracts for gold prices fluctuated in a narrow range tending to decline during the Asian session, to witness its rebound for the third consecutive session from its highest ever, overlooking the decline of the US dollar index for the first time in three sessions according to the inverse relationship between them before the developments and the expected economic data today, Tuesday, by the economy. The US is the largest economy in the world and with investors ’assessment of the existing tensions between Washington and Beijing before the upcoming talks between the two parties regarding what has been achieved in the first phase of their trade agreement.

At exactly 03:53 am GMT, gold futures contracts for December delivery fell 0.55% to trade at $ 2,038.40 per ounce compared to the opening at $ 2,038.40 per ounce, knowing that the contracts started trading on a downward price gap after it was concluded Yesterday's trading was at $ 2,039.70 per ounce, while the US dollar index declined 0.04% to 93.56 compared to the opening at 93.60.

Investors are awaiting the US economy for the release of the producer price index reading, which is a preliminary indicator of inflation, which may reflect a growth of 0.3% against a contraction of 0.2% in June. The core reading of the same index may also show a growth of 0.1% against a contraction of 0.3%, while it may appear. The annual reading of the index shrinking deflation to 0.7% from 0.8%, and the substantive annual reading may reflect stability at zero levels versus 0.1% growth.

Other than that, last Sunday we followed the signing of US Republican President Donald Trump of a series of executive orders to extend unemployment benefits after the White House talks with Congress collapsed amid differing views of the Democratic Party, which has the majority of the House of Representatives, and the Republican Party, which has the majority of the Senate, about the virus relief package talks. Amid growing concern over the outbreak of a second wave of Coronavirus.

This comes after the forty-fifth US President Trump last week threatened to act on his own if he failed to reach an agreement with the Democrats, and those executive orders will save $ 400 a week in unemployment aid, and that is less than $ 600 in the week that was passed before. Congress earlier this year following the coronavirus pandemic.

Other than that, we watched yesterday as China imposed sanctions on 11 American citizens, including Senators Ted Cruz, Marco Rubio and Tom Cotton in addition to Josh Hawley and Pat Tommy, and this step by Beijing came after Washington announced last Friday that it would impose sanctions on 11 individuals. Including Hong Kong leader Carrie Lam for her role in overseeing the implementation of Beijing's policies to wheat freedom and the democratic process in Hong Kong.

Technical analysis

Gold price achieved a break to support the ascending channel that appears in the image, now approaching the 23.6% Fibonacci correction level, which constitutes an important support at 2008.80, noting that the SMA 50 meets with this support to add more strength to it, which supports the chances of continuing the overall bullish trend, Whose next main target is at 2090.00.

From here, we expect to witness positive trading today, and the price needs to breach 2039.00 to facilitate the task of heading towards the aforementioned target, bearing in mind that breaking 2008.80 will pressure the price to make more bearish correction, whose next target reaches 1967.90 before any new attempt to rise.

The expected trading range for today is between 2000.00 support and 2060.00 resistance.

The expected trend for today: Overall Bullish.