Gold analysis 25.09.2020

Futures contracts for gold prices fluctuated in a narrow range slanting to rise during the Asian session, to witness its rebound for the second session in a row from its lowest since July 22, overlooking the rise of the dollar index according to the inverse relationship between them on the cusp of developments and economic data expected today, Friday, by the American economy The world's largest economy and amid investors weighing the opportunities for a new US stimulus package against an increase in coronavirus cases.

 At 06:04 GMT, gold futures contracts for December delivery rose 0.10% to trade at $ 1,874.60 an ounce, compared to the opening at $ 1,872.70 per ounce, knowing that the contracts started the session on a downward price gap after it was concluded Yesterday's trading was at $ 1,876.90 per ounce, while the US dollar index rose 0.03% to 94.33, compared to the opening at 94.30.

 Investors are currently awaiting the US economy to unveil the durable goods orders index, which represents about half of consumer spending, which accounts for more than two-thirds of GDP in the United States, and which may reflect a slowdown in the pace of growth to 1.1% compared to 11.4% last July. The core reading of the same index may also show a slowdown in the pace of growth to 1.0%, compared to 2.6% in July.

 Later today, markets are looking forward to a speech by the President of the New York Federal Reserve and a member of the Federal Open Market Committee, John Williams, about the labor market in light of the Corona pandemic at a webinar hosted by the University of Rochester, and this comes hours after the expiration of the semi-annual testimony of Federal Reserve Governor Jerome in front of The US Congress has both the House Financial Services Committee and the Senate Banking Committee.

 Powell stated that about $ 195 billion was provided in the Aid, Relief and Economic Security Bill in the face of the repercussions of the "CARES Act" in order to confront the negative repercussions of the Corona pandemic so far, while expressing that small and medium companies need more support for a longer period than He postponed its return to what it was before the health crisis, and touched on the fact that the Federal Reserve continues to support the economy in these unprecedented situations.

 Powell noted that the Federal Reserve did not provide any loans to large companies directly, while stating that he does not agree with the raising of local state governments taxes during the current period and that the Fed will continue with the wage protection program if it obtains congressional approval, amid his refusal to comment on talks The poles of US policy, the Republican Party and the Democratic Party, about the second anticipated stimulus package in the markets.

In the same context, Powell stressed that failure to approve more stimulus will significantly harm companies and families, especially in light of the continuing downside risks to the American economy, explaining that he believes that Congress should use $ 130 billion to support the wage protection program, with reference to the availability of a vaccine. Corona will enhance the state of certainty in the markets and among families and companies.

Technical analysis

The price of gold ended yesterday's trading above the level of 1860.90 after the noticeable rise it witnessed in the last sessions, to provide signs of an attempt to stop the negative pressure that dominates the recent trades, but we note that the stochastic indicator is now providing negative signals, in addition to the MA 50 negatively pressing on The price, and the price is moving inside an ascending minor channel that may form a bearish continuation flag pattern.

Thus, the conflict between the technical factors makes us prefer stopping aside until we get a clearer signal for the next trend, noting that breaching 1877.00 will push the price to achieve more gains and test areas of 1901.80 then 1911.00 mainly, while breaking the support 1860.90 will re-activate the bearish trend scenario. Whose next main target is at 1794.85.

The expected trading range for today is between 1840.00 support and 1900.00 resistance.

The expected overall trend for today: Neutral.