Gold analysis 17.09.2020

Futures contracts for gold prices decreased by more than one percent during the Asian session amid the rebound of the US dollar index to the tenth session in thirteen sessions from its lowest since late April of 2018 according to the inverse relationship between them following the decisions and directions of the Bank of Japan and on the cusp of upcoming economic developments and data Thursday by the US economy the largest in the world.

At 06:13 a.m. GMT, gold futures contracts for December delivery fell 1.09% to trade at $ 1,946.40 per ounce compared to the opening at $ 1,967.60 an ounce, knowing that the contracts started the session on a downward price gap after it was concluded Yesterday's trading was at $ 1,970.50 an ounce, with the US dollar index rising 0.35% to 93.49 compared to the opening at 93.17.

We have followed the decision of monetary policy makers at the Bank of Japan to keep interest rates negative at 0.10%, with the Bank of Japan unveiling the monetary policy statement and also staying on pledging to direct the yield of 10-year government bonds at zero and confirming that additional steps will be taken to facilitate Without hesitation, if necessary, attention is now focused on the press conference to be held by Bank of Japan Governor Haruhiko Kuroda.

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 September 12th, which may reflect a decline of 59,000 requests to 825,000, compared to 884,000 in the previous weekly reading. The continuing aid for the past week, on the fifth of this month, decreased by 385,000 requests to 13.0 million, compared to 13.385 million.

This comes in conjunction with the disclosure of housing market data, with the release of the housing starts index and the building permit index reading, and amid expectations that the building permits reading will reflect an increase to about 1.51 million permits compared to about 1.50 million permits in July, while the home reading may clarify The start-up decreased to about 1.47 million homes, compared to about 1.50 million homes in July.

This also comes in conjunction with the disclosure by the largest industrial country in the world of industrial sector data with the release of the Philadelphia Industrial Index reading, which may reflect a contraction of the expansion to a value of 15.0 compared to 17.2 last August, and this comes hours after the end of the committee meeting. The Federal Reserve Open Market September 15-16, during which interest rates were kept between zero and 0.25%.

We would like to point out that the Federal Reserve revealed yesterday, after the meeting, the expectations of the members of the Federal Commission for growth rates, inflation and unemployment in addition to the future interest rates for the next three years, and it is reported that the Federal Reserve previously adopted several stimulus programs until the economy showed signs of recovery, on top of which is a purchase program Treasury bills at $ 80 billion a month and mortgage notes at at least $ 40 a month.

In the same context, we also followed yesterday's press conference held by Federal Reserve Governor Jerome Powell, half an hour after the end of the meeting, to comment on the decisions and directions of the committee, which included expectations to stay the leader at zero levels until 2023, in which he expressed the importance of fiscal policy The stimulus package to support the economy, as it affirmed the Federal Reserve’s commitment to using all its tools to support the recovery.

Technical analysis

Gold price found it difficult to surpass the level of 1967.90, which constituted a strong resistance in front of the upside wave, to rebound strongly to the downside and head towards a possible test of the pivotal support 1934.86, which requires attention from upcoming trades, as the continuation of negative pressure and breaking this level will lead the price to suffer more losses and turn Downward.

So far, the overall positive scenario remains valid, provided that it remains above 1934.86, with a reminder that the breach of 1967.90 is required to confirm the opening of the path towards 2008.80.

The expected trading range for today is between 1930.00 support and 1980.00 resistance