Gold analysis 23.09.2020

Gold futures contracts decreased by nearly one percent during the Asian session amid the rise of the US dollar index to the highest since the 27th of July, according to the inverse relationship between them on the cusp of developments and economic data expected today, Wednesday, by the US economy, which includes the testimony of Federal Reserve Governor Jerome Powell in front of Congress and amid growing concern over a second wave of Coronavirus and tensions between Washington and Beijing.

At exactly 06:02 a.m. GMT, gold futures contracts for December delivery fell 0.86% to trade at $ 1,888.90 an ounce compared to the opening at $ 1,905.10 an ounce, knowing that the contracts started the session on a downward price gap after it was concluded Yesterday's trading at $ 1,907.60 an ounce, with the US dollar index rising 0.20% to 94.16 compared to the opening at 93.98.

Investors are awaiting the American economy to reveal the housing market data with the release of the house price index reading, which may indicate a slowdown in growth to 0.4% compared to 0.9% last June, in conjunction with the speech of a member of the Federal Open Market Committee and President of the Cleveland Federal Reserve Bank. Loretta Meester at the Chicago Satellite Payments Symposium.

This comes before we witness the unveiling of the preliminary reading of the Markit Industrial and Service Purchasing Managers Index on America, which may reflect the shrinking of the industrial sector in the largest industrial country in the world to a value of 52.5 compared to 53.1 in the previous reading for August, and the expansion of the service sector to It was worth 54.5, compared to 55.0 in August.

Down to the testimony of Federal Reserve Governor Jerome Powell before the House Select Committee in Washington, and we would like to point out that Powell reported yesterday in the first half of his semi-annual testimony before Congress, specifically before the House Financial Services Committee, that the Federal Reserve had relaxed a number of banking regulations Temporarily and he's open to doing more of that.

Powell also noted in the first half of his testimony, which is expected to complete the second half of it tomorrow, Thursday, in front of the Senate Banking Committee, along with Treasury Secretary Stephen Mnuchin, about the "CARES" law, because small banks may bear a greater burden and be exposed to greater things such as mortgages, adding The lack of response in the commercial real estate market was researched by borrowers, explaining that it is difficult to find a place to have an impact.

In the same context, Powell stated that the Fed does not see demand for very small loans by individual borrowers within the Main Street lending program, and that corporate bond purchases support financial conditions in the credit market.

Technical analysis

Gold price closed the daily candle below the level of 1901.80, which supports the continuation of our bearish expectations effectively during the upcoming period, paving the way for us to head towards our next negative target that reaches 1860.90.

Consequently, the negative scenario will remain valid and effective, supported by the negative pressure formed by the EMA50, noting that breaching 1901.80 then 1911.00 will stop the expected decline and push the price to achieve intraday gains that start by testing 1934.86 areas before determining the next trend's fate more precisely.

The expected trading range for today is between 1870.00 support and 1911.00 resistance.

The expected general trend for today: Bearish.