Gold analysis 07.10.2020

Futures contracts for gold prices fluctuated in a narrow range that tends to rise during the Asian session, to witness its rebound from its lowest since September 28, overlooking the bounce of the US dollar index for the second session from its lowest since the 21st of the same month according to the inverse relationship between them on the cusp of economic developments and data Expected Wednesday by the US economy, the largest economy in the world, which includes the speech of members of the Federal Open Market Committee.

At 04:22 a.m. GMT, gold futures contracts for next December delivery rose 0.25% to trade at $ 1,887.30 an ounce compared to the opening at $ 1,882.60 an ounce, knowing that the contracts started the session on a downward price gap after it was concluded Yesterday's trading was at $ 1,908.80 per ounce, while the US dollar index rose 0.02% to 93.84, compared to the opening at 93.82.

This is anticipating investors from the US economy for what will be revealed by a member of the Federal Open Market Committee and the President of the Minneapolis Federal Reserve, Neil Kashkari, about racism and the economy in a hypothetical series of events, and this comes before the Fed disclosed the minutes of the Federal Open Market Committee meeting held on 15 - 16 September, during which interest rates were kept between zero and 0.25%.

In the same context, the Federal Reserve revealed at the time the expectations of members of the Federal Commission for growth rates, inflation and unemployment in addition to the future of interest rates for the next three years, and it is mentioned that the Federal Reserve had previously adopted several stimulus programs until the economy showed signs of recovery, on top of which is the bond-buying program. Treasury at $ 80 billion a month and mortgage bonds at least $ 40 a month.

We also followed the press conference held by Federal Reserve Governor Jerome Powell after the end of the meeting to comment on the decisions and directions of the committee, which included expectations to remain the leader at zero levels until late 2023, in which he expressed the importance of the fiscal stimulus policy to support the economy, amid his assertion of commitment The Federal Reserve is using all its tools to support the recovery.

All the way to the talk of a member of the Federal Open Market Committee and the President of the New York Federal Reserve, John Williams, about targeting the average flexible inflation at an online event hosted by the Hoover Economic Policy Group, and this comes hours after Fed Governor Powell's call on Tuesday for continued strong fiscal and monetary stimulus For the sake of the economic recovery that he declared "there is a long way to go".

Other than that, we followed yesterday the expression of US President Donald Trump, by tweeting to him on his official Twitter account, "He has instructed my representatives to stop negotiating until after the elections when, as soon as I win, we will pass a major stimulus bill focusing on hardworking Americans and small businesses." Observers considered this a gamble by Trump before the upcoming US presidential elections on November 3.

Technical analysis

Gold price faced strong negative pressure yesterday to break 1901.80 and achieve our first expected negative target at 1877.00, which supports the continuation of the expected bearish trend scenario in the intraday and short term, waiting for more decline to visit 1860.80, which represents our next target.

Consequently, we will continue suggesting the downside trend for the upcoming period supported by the move below the EMA50, noting that the continuation of the expected decline depends on stability below 1901.80, and most importantly below 1915.00.

The expected trading range for today is between 1860.00 support and 1900.00 resistance.

The expected general trend for today: Bearish.