Gold analysis 26.10.2020

Gold futures fluctuated in a narrow range that tends to decline during the Asian session, to witness its rebound to the fourth session from its highest since October 12, when it tested its highest since September 21, amid the US dollar index resuming rebound from its lowest since the second From September to the second session in four sessions according to the inverse relationship between them.

This comes amid investor attention directed to the activities of the meeting of senior Chinese leaders in the Central Committee of the Communist Party of China until the 29th of this month to plan the path of economic development for the largest Asian economies for the next five years and on the cusp of economic developments and data expected today, Monday, by the US economy, the largest economy in the world, and in shade The chances of US lawmakers adopting the second package of stimulus before the presidential elections next week have faded with the passage of time, in conjunction with the increase in cases of coronavirus globally, especially in the West.

At exactly 05:21 am GMT, gold futures contracts for December delivery fell 0.35% to trade at $ 1,899.40 per ounce, compared to the opening at $ 1,906.00 per ounce, knowing that the contracts started the session on a rising price gap after it was concluded Last week's trading at $ 1,905.20 an ounce, with the dollar index rising 0.17% to 92.92 compared to the opening at 92.76.

Investors are awaiting the US economy to unveil the housing market data with the release of the new home sales index reading, which may show a rise of 2.8% to about 1,025 thousand homes compared to a rise of 4.8% at 1,011 thousand homes last August. Otherwise, the tension continues. Attraction exists between the Republicans and Democrats of US policy over the approval of a second stimulus package to support the largest economy in the world in the face of the repercussions of the Corona pandemic, knowing that with the passage of time the chances of adopting it before the upcoming presidential elections next week diminish.

In another context, the markets are looking forward to the results of the upcoming daily intensive negotiations between the European Union and Britain this week, which aim to finalize an agreement on future and commercial relations between the two parties by the middle of next month, especially after Britain's exit from the European Union this year, and the focus is currently on The situation is likely to deteriorate due to the Corona outbreak in the West.

Technical analysis

The price of gold ended last Friday's trading below the level of 1901.80, and starts today with a bearish tendency in an attempt to move away from the aforementioned level, which activates the bearish trend scenario on an intraday basis, on its way to head towards the level of 1860.90 as a next negative target.

Thus, the bearish bias will be expected for today, supported by moving below the SMA 50, bearing in mind that the breach of 1901.80 - 1908.60 levels will stop the suggested decline and push the price to recover again.

The expected trading range for today is between 1875.00 support and 1915.00 resistance.

The expected general trend for today: Bearish.