Gold analysis 28.08.2020

Gold prices rose during Friday's trading in the morning trading in the Asian period, after markets absorbed the statements of Federal Reserve Chairman "Jerome Powell" and the dollar's decline against most of the major currencies.

In his speech on the sidelines of the "Jackson Hole" forum, Powell said that the central bank decided to change its strategy on inflation and target an average of 2% higher for some time, which means a commitment to cheap borrowing in the near future.

With this step, the Federal Reserve aims to provide support to the US economy in the face of the repercussions of the Corona crisis, which led to a contraction of GDP in the second quarter by more than 30%.

In a related context, the dollar index fell (against a basket of major currencies) by 05:00 GMT by 0.2% to 92.8 points, and recorded the highest level at 93.1 points and the lowest level at 92.8 points.

In terms of trading, spot gold contracts rose by 0.8% to 1947.7 dollars an ounce after the December futures contract closed yesterday's session, down by 1% to 1932.6 dollars an ounce.

Technical analysis

Gold price ended yesterday's trading above 1934.86 after it succeeded in reaching our main waited target at 1901.80 yesterday, where it built on the support of the main ascending channel and rebounded to the upside to resume the main bullish path, on its way to achieve new gains that start at 1967.90 and extend to 2008.80.

Thus, the bullish trend will be suggested for today, and the price needs to obtain enough positive momentum to rush towards achieving the aforementioned targets, bearing in mind that the breach of 1934.86 will put the price under new negative pressure targeting a test of critical support 1901.80 again.

The expected trading range for today is between 1920.00 support and 1970.00 resistance.

The expected general trend for today: Bullish.