Gold analysis 17.08.2020

Futures contracts for gold prices fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound to the fifth session in seven sessions from its highest ever, overlooking the bounce of the US dollar index for the fourth consecutive session from its high since the third of August according to the inverse relationship between them after Economic developments and data that they followed on the Japanese economy and on the cusp of developments and expected economic data on Monday by the US economy and in light of investors ’evaluation of the tensions between Washington and Beijing.

At exactly 4:52 am GMT, gold futures contracts for December delivery fell 0.34% to trade at $ 1,949.80 per ounce compared to the opening at $ 1,956.40 per ounce, knowing that the contracts started the session on a rising price gap after it was concluded Last week's trading was at $ 1,949.80 per ounce, while the US dollar index declined 0.09% to 92.99 compared to the opening at 93.07.

We have followed up by the Japanese economy, the second largest in Asia and the third largest in the world, the release of the GDP index reading, which showed the expansion of the contraction to 7.8% compared to 0.9% in the last first quarter, worse than expectations that indicated the expansion of the contraction to 7.5%, as well. The annual reading of the same index showed that the contraction widened to 27.8%, reflecting the worst ever, versus 2.2%, also worse than expectations for a 27.2% contraction.

On the other hand, investors are currently awaiting the US economy, the largest industrial country in the world, for the release of the New York industrial index reading, which may reflect a contraction of the expansion to a value of 14.6 compared to 17.2 in July, and this comes before we witness the disclosure of housing market data with the release of A housing index reading by the National Association of Home Builders may reflect a rise to a value of 74 versus 72 in July.

Technical analysis

Gold price is testing the pivotal support floor 1934.68, and as we indicated in our recent reports, the price needs to consolidate above this level to keep the bullish trend scenario valid, supported by the positive sign that appears through the stochastic indicator, pending the resumption of the bullish tendency to breach 1967.90 and confirm the opening of the way towards the direction towards 2008.80 Next stop.

From here, we are continuing to suggest the bullish trend for the upcoming period, noting that breaking 1934.68 will put the price under negative pressure, whose targets start with testing 1901.80 and may extend to 1860.90 before any new attempt to rise.

The expected trading range for today is between 1910.00 support and 1990.00 resistance.

  We recommend buying gold above 1938.50 levels, the target of 1981.00 and stopping a loss below the level of 1920.00.

The expected general trend for today: Bullish.