Gold analysis 10.09.2020

Futures contracts for gold prices fluctuated in a narrow range sloping to an upward trend during the Asian session, to witness their rebound for the third consecutive session from the lowest since August 26, amid the bounce of the US dollar index for the second consecutive session from the high of its 12th of the same month according to the inverse relationship between them on The cusp of economic developments and data expected today, Thursday, from the economies of the euro area, which includes decisions and directions of the European Central Bank, developments and economic data by the US economy, the largest economy in the world.

At exactly 05:24 am GMT, gold futures contracts for next December delivery rose 0.03% to trade at $ 1,955.80 per ounce, compared to the opening at $ 1,955.30 per ounce, knowing that the contracts started the session on a rising price gap after it closed Yesterday's trading at $ 1,954.90 per ounce, with the US dollar index declining 0.09% to 93.17 compared to the opening at 93.25.

The markets are looking forward to France, the second largest economy in the euro area, the release of the industrial production index reading, which may reflect a slowdown in the pace of growth to 5.1% compared to 12.7% last June, before we see Italy, the third largest economy in the region, the release of the index reading itself, which may appear. It also slowed the pace of growth to 3.6%, compared to 8.2% in June.

This comes before we witness the activities of the ECB meeting and the disclosure of the monetary policy statement amid expectations that interest rates will remain at zero levels, leading to the press conference of the European Central Bank Christine Lagarde, who will report to me again later today to make concluding remarks at a virtual banking conference hosted by him German Central Bank.

Other than that, the markets are closely watching the developments of the Brexit file after they entered negotiations on the reformulation of future relations between the two parties following the implementation of the exit on January 31, in a state of stumbling due to the conflicting views between the two sides in several Main points, most notably immigration and the customs union, which opens the way for Britain to leave without an agreement with the European Union on October 15.

On the other hand, investors are currently awaiting the American economy for the release of the aid claims index reading for the past week on the fifth of September, which may reflect a decline by 43,000 requests to 838,000, compared to 881,000 in the previous weekly reading. The continuing aid for the past week, on August 29, decreased by 329,000 to 12,925,000, compared to 13,254,000.

This comes in conjunction with the disclosure of inflation data with the release of the producer price index reading, which is a preliminary indicator of inflation, which may reflect a slowdown in growth to 0.2% compared to 0.6% in July, and the core reading of the same index may also indicate a slowdown in growth to 0.2% compared to 0.5%. While the annual reading of the index may show that the deflation has shrunk to 0.3% from 0.4%, and the core annual reading reflects the stability of growth in August at 0.3%.

This comes before we witness the release of the final reading of the wholesale stocks index, which may confirm a decline of 0.1%, unchanged from the previous initial reading for the month of July, and compared to a decline of 1.4% last June, otherwise, according to the latest figures issued by the World Health Organization The number of cases infected with the Coronavirus has increased to nearly 27.5 million, and 894,983 people have died in 216 countries, and research and experiments are still being conducted with the aim of reaching a vaccine.

Technical analysis

Gold price ended yesterday's trading in a positive note, to settle above the main ascending channel support again, which leads the price to achieve expected gains in the upcoming sessions, supported by the move above the MA 50, waiting to head towards the level of 1967.90 as a first main target.

Thus, the bullish bias will be favorable for today, and the price needs to obtain positive momentum that will contribute to the positive targets that extend to 2008.80 after surpassing the first target, bearing in mind that the continuation of the bullish wave requires stability above 1934.86.

The expected trading range for today is between 1930.00 support and 1970.00 resistance.

The expected general trend for today: Bullish.