Gold analysis 19.10.2020

Futures contracts for prices fluctuated in a narrow range that tends to rise during the Asian session, overlooking the positive stability of the US dollar index according to the inverse relationship between them following developments and economic data that they followed on the Chinese economy, the largest consumer of minerals in the world and on the cusp of economic developments and data expected today, Monday, by the largest American economy The world's economy, which includes the Fed Governor and the Federal Open Market Committee members, via satellite.

At 06:22 a.m. GMT, gold futures contracts for next December delivery rose 0.15% to trade at $ 1,906.00 per ounce, compared to the opening at $ 1,903.20 per ounce, knowing that the contracts began trading on a downward price gap after it was concluded Last week's trading was at $ 1,906.40 per ounce, while the US dollar index rose 0.05% to 93.76 compared to the opening at 93.71.

We have followed up on the disclosure of the National Bureau of Statistics of China on the seasonally adjusted reading of the GDP for the third quarter, which showed a slowdown in growth to 2.7% compared to 11.5% in the last second quarter, worse than expectations that indicated a slowdown in growth to 3.2%, while the annual reading of the same index showed an acceleration. Growth to 4.9% compared to 3.2% in the second quarter, also below expectations, which indicated a widening of growth to 5.5%.

This coincided with the annual retail sales index of China, the largest economy in Asia and the second largest in the world, showed that growth accelerated to 3.3% compared to 0.5% last August, surpassing expectations that indicated an acceleration of growth to 1.7%, and in another context, she explained. China's unemployment rate index reading fell to 5.4% from 5.6% in August, also beating expectations that indicated a decline to 5.5%.

We have also followed up by the largest industrial country in Asia and the second largest industrial country in the world after the United States of America, the disclosure of industrial sector data with the release of the annual reading of the industrial production index by the National Bureau of Statistics of China, which showed an acceleration of growth to 6.9% compared to 5.6% in August. / August, also outperforming expectations which indicated growth to accelerate to 5.8%.

On the other hand, we followed Saturday the report of the official Chinese news agency Xinhua, which dealt with the fact that Beijing has passed the Export Control Law that restricts exports of controlled substances, which allows China to act against countries that misuse export controls in a way that harms Beijing's interests, and we would like to point out that the report did not It determines which countries are the targets of that law, but it is likely that the United States will be the target of it, after it recently imposed restrictions on the international semiconductor manufacturer, which is the largest Chinese manufacturer of electronic chips.

On the other hand, markets are looking forward to a speech by the Fed Governor, who is scheduled to participate later today in a panel discussion on cross-border payments and digital currencies at the annual meeting of the International Monetary Fund, before we witness the release of the US housing market data with the release of a reading. The housing index by the National Association of Home Builders, which may reflect stability at its value of 83 during this month.

To the members of the Federal Open Market Committee, beginning with the Deputy Governor of the Federal Reserve, Richard Clarida, who is expected to speak later today about the economic expectations and monetary policy at the default conference of the American Bankers Association, before the speech of the President of the Philadelphia Federal Reserve Patrick Harker about the recovery The economy from the recession left by the Corona pandemic.

Technical analysis

 The price of gold faced continuous negative pressures and attacked the level of 1901.80, which provides signs of the price's direction to try to return to the decline, supported by the negative pressure formed by the moving average 50, but on the other hand, we note that the stochastic indicator is showing positive signs that may push the price to try to recover and achieve intraday gains Next sessions.

From here, this conflict between the technical factors makes us prefer stopping on neutrality until the price confirms its position in relation to the level of 1901.80, as stability below it will pressure the price to head towards the levels of 1883.00 and then 1860.90 as main negative targets, while the consolidation above it will lead the price to resume the bullish intraday wave and visit The level is 1934.86 initially.

The expected trading range for today is between 1880.00 support and 1920.00 resistance.

The expected overall trend for today: Neutral.