Gold analysis 05.10.2020

Gold futures declined to witness a rebound for the second consecutive session from the highest since September 22, overlooking the bounce of the US dollar index for the fifth session in seven sessions from its highest since July 24, according to the inverse relationship between them on the cusp of developments and upcoming economic data Monday, by the US economy, the world's largest economy, amid markets ’assessment of US President Donald Trump's health and developments related to the upcoming US stimulus package.

At 04:23 a.m. GMT, gold futures contracts for December delivery fell 0.64% to trade at $ 1,898.70 an ounce compared to the opening at $ 1,910.90 an ounce, knowing that the contracts started the session on a rising price gap after it was concluded Last week's trading was at $ 1,907.60 per ounce, while the US dollar index fell 0.13% to 93.75 compared to the opening at 93.87.

Investors are currently awaiting the market is looking to reveal the final reading of the Institute of Service Provisioning Index by Markit on the United States, which may reflect the stability of the expansion at a value of 54.6, with little change from what it was in the preliminary reading for the past month and compared to an expansion of 55.0 last August. .

This comes before the US economy witnesses the release of the Institute for Service Provision Index reading, the importance of which lies in the fact that the service sector accounts for more than two-thirds of the US gross domestic product, which may explain the contraction of the expansion to a value of 56.3 compared to 56.9 in August.

Otherwise, we followed the report that touched on the fact that US President Donald Trump is close to recovering from his infection with the Coronavirus, as the US President's doctor, Dr. Sean Connelly, said yesterday that his condition has improved and he could be discharged from the hospital later today, Monday.

Otherwise, the markets are looking forward to the start of the activities of the Eurogroup meetings, which are attended by the finance ministers of the member states in the region, the Commissioner for Economic and Monetary Affairs and the European Central Governorate, which discuss many financial issues, and this comes in conjunction with the continuation of the European Union and Britain's negotiations regarding the latter's exit from it.

Technical analysis

Gold price was not able to hold for long above the level of 1901.80, as it encountered a strong resistance barrier at 1911.00 that forced it to rebound to the downside to settle below the first level, which re-activates the bearish trend scenario on the intraday basis, which targets 1877.00 then 1860.80 as next major stations.

Therefore, the bearish bias will be favorable for today, and the price needs to break 1895.00 to facilitate the task of heading towards the aforementioned targets, bearing in mind that the continuation of the bearish wave depends on stability below 1901.80 and 1911.00 levels.

The expected trading range for today is between 1870.00 support and 1915.00 resistance

The expected general trend for today: Bearish.