Gold analysis 28.10.2020

Futures contracts for gold prices fluctuated in a narrow range that tends to decline during the Asian session, overlooking the decline of the US dollar index according to the inverse relationship between them, in conjunction with the continuing activities of the meeting of senior Chinese leaders in the Central Committee of the Communist Party of China and on the cusp of economic developments and data expected today, Wednesday, by the US economy The largest economy in the world and in the shadow of market pricing of a second wave of Coronavirus outbreak globally, especially in the West.

At exactly 05:38 a.m. GMT, gold futures contracts for December delivery fell 0.03% to trade at $ 1,909.30 an ounce, compared to the opening at $ 1,909.80 per ounce, knowing that the contracts started the session on a downward price gap after it was concluded Yesterday's trading was at $ 1,911.90 an ounce, while the dollar index declined 0.04% to 93.11 compared to the opening at 93.11.

Investors' attention is now directed to the activities of the meeting of senior Chinese leaders in the Central Committee of the Communist Party of China, which began at the beginning of this week and continues until tomorrow Thursday to plan the course of economic development for the next fifteen years for the largest Asian economy, the second largest economy in the world, the largest consumer of minerals in the world and the second largest country. Industrial in the world.

Otherwise, we followed yesterday the data of the Gold Association in China that gold consumption increased during the past three months on September 30 from the second quarter by 29% to about 548 tons of gold, while the data reflected a similar decline in the same percentage for the same months of 2019 We would like to point out that the Union had previously reported that China's consumption declined 38% on an annual basis in the first half of 2020 due to the outbreak of Corona and the slowdown in the Chinese economy.

On the other hand, investors are currently awaiting the US economy to unveil the merchandise trade balance index reading, which may reflect the widening of the deficit to a value of $ 84.8 billion compared to $ 82.9 billion last August, in conjunction with the release of the preliminary reading of the wholesale stocks index, which may Indicates that the pace of growth stabilized at 0.4% in August.

And this comes before we witness the participation of a member of the Federal Open Market Committee and Chairman of the Dallas Federal Reserve Bank Robert Kaplan in a virtual panel discussion with former Bank of England Governor Mark Carney hosted by the Federal Reserve Bank of  Dalas. Other than that, the tug of war continues between the two poles of US policy, Republicans and Democrats about Approval of a second stimulus package to support the economy in facing the repercussions of the Corona pandemic.

In addition, the markets are looking forward to the developments and results of the intensive daily negotiations between the European Union and the United Kingdom during this week, which aim to finalize an agreement on future and trade relations between Brussels and London by the middle of next month, especially after Britain's exit from the European Union on January 31. the past.

Technical analysis

The price of gold is hovering around the SMA 50, and we note that the stochastic indicator lost its positive momentum to show negative signs now, which motivates the price to resume the expected downside trend for the coming period, which depends on stability without the broken support of the ascending channel that appears in the image, waiting to head towards 1860.90 areas in a way. Main.

Therefore, we await negative trading today, bearing in mind that breaching 1912.00 will stop the expected decline and lead the price to achieve new intraday gains, targeting initially testing 1934.86.

The expected trading range for today is between 1890.00 support and 1920.00 resistance

The expected general trend for today: Bearish