Gold analysis 06.10.2020

Gold futures fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound for the second consecutive session from its highest since September 22, overlooking the bounce of the US dollar index for the sixth session in eight sessions from its highest since July 24, according to The inverse relationship between them on the cusp of developments and economic data expected today, Tuesday, by the US economy, the largest economy in the world, which includes the speech of Federal Reserve Governor Jerome Powell and the members of the Federal Open Market Committee.

 At 04:31 AM GMT, gold futures contracts for December delivery fell 0.08% to trade at $ 1,916.20 an ounce compared to the opening at $ 1,917.80 an ounce, knowing that the contracts started the session on a downward price gap after it was concluded Yesterday's trading was at $ 1,920.10 per ounce, while the US dollar index fell 0.03% to 93.40 compared to the opening at 93.42.

Investors are currently awaiting the American economy to release a reading of the trade balance for goods, which may explain the widening of the deficit to a value of $ 66.2 billion compared to $ 63.6 billion last July, before we witness the release of a statistical reading of employment opportunities and job turnover, which may reflect a decline. To about 6.50 million, compared to about 6.62 million in July.

This comes, before we witness via satellite the speech of Fed Governor Jerome Powell about the economic outlook at the annual meeting of the National Association for Business Economics, and before the members of the Federal Open Market Committee each of Philadelphia Federal Reserve Bank President Patrick Harker talk about education at a seminar hosted by the Interconnection Center Global, and Dallas Fed President Robert Kaplan on America and the global economy.

Other than that, we watched yesterday the exit of US President Donald Trump from Walter Reed Military Hospital and his return to the White House after receiving treatment for the Coronavirus, and it is reported that Trump was transferred to the hospital last Friday after announcing that he and his wife Melania were infected with the coronavirus, and we would like to point out that the doctor team is for President Trump. Yesterday it was reported that the president's condition "has continued to improve" over the past 24 hours.

In another context, we followed yesterday the Democratic US House Speaker Nancy Pelosi talking with US Treasury Secretary Stephen Mnuchin over the phone to discuss opportunities for a second stimulus package to address the repercussions of the Corona pandemic, and it is expected that they will resume their talks later today, and it is reported that Pelosi noted last Sunday. "We are making progress" on the stimulus package, which includes the resumption of some unemployment benefits that were suspended in July.

We would like to point out that the Republican US President Trump called through his tweet to him Sunday via his Twitter account to "work together" and complete the stimulus package, and this comes hours after the House of Representatives approved last Thursday a bill for a financial stimulus package worth $ 2.2 trillion supported by Democrats, However, the bill was notably rejected by Republicans.

Technical analysis

The bullish gold price rally stopped at the resistance line that appears in the chart above, to start providing negative trades indicating that the price is heading towards resuming the short-term bearish trend, supported by the negative crossover signal now provided by the stochastic indicator, waiting to break the 1901.80 level to facilitate the task of heading towards our main targets That starts at 1877.00 and then 1860.80.

Thus, we expect to witness negative trading in the upcoming sessions, unless the 1918.00 level is breached and stability above it.

The expected trading range for today is between 1880.00 support and 1925.00 resistance.

The expected general trend for today: Bearish.