Gold analysis 02.11.2020

Futures contracts for gold prices fluctuated in a narrow range that tends to rise during the Asian session, to witness its retracement of the third session from its lowest since September 28, overlooking the rise of the US dollar index to its highest since the end of the same month according to the inverse relationship between them following developments and economic data that followed them on The Chinese economy is the largest consumer of the mineral in the world at the weekend and on the cusp of economic developments and data expected on Monday by the US economy, the largest economy in the world.

At exactly 05:55 am GMT, gold futures contracts for next December delivery rose 0.17% to trade at $ 1,880.20 an ounce compared to the opening at $ 1,877.00 per ounce, knowing that the contracts started the session on a downward price gap after it was concluded Last week's trading was at $ 1,879.90 per ounce, while the US dollar index rose 0.12% to 94.17, compared to the opening at 94.06.

Last Saturday, we followed up on the disclosure of the China Federation of Logistics and Procurement (CFLP) of the industrial and service sector data for the past month, which indicated that the expansion of the industrial sector decreased to a value of 51.4 in line with expectations compared to 51.5 in the previous reading of last September, and the expansion of the service sector to its value 56.2 is also in line with expectations versus 55.9 in September.

On the other hand, the markets are looking to unveil the final reading of the manufacturing PMI by Markit from the United States, which may reflect the stability of the expansion at a value of 53.3, unchanged from the initial reading for the past month and compared to 53.2 in September, before we witnessed before. The US economy released its construction spending index reading, which shows growth slowing to 1.0%, compared to 1.4% in August.

This comes in conjunction with the disclosure by the largest industrial country in the world of a reading of the Institute for Industrial Supply Index, which may show an expansion to a value of 55.6 compared to 55.4 in September, while the reading of the same index measured by prices may indicate a decrease in the breadth to a value of 60.5 compared to 62.8 in September, and in another context, the markets are looking forward to tomorrow's US presidential elections in the United States of America.

Technical analysis

Gold price continues to fluctuate around 1882.40, and it needs to stabilize below this level to keep the bearish trend scenario valid for the upcoming period, as its breach will push the price to test 1901.80 before any new attempt to decline.

The SMA 50 continues to press negatively on the price, while the stochastic oscillator begins to provide negative signals now, and therefore, we believe that opportunities are available to resume negative trades today, noting that our targets start with testing 1860.90, whose break represents the key to the rally towards 1794.85 as a next negative target.

The expected trading range for today is between 1850.00 support and 1895.00 resistance.

The expected general trend for today: Bearish.