Gold Analysis 11.02.2019

Gold futures traded in a tight range slipping into the Asian session to see their fourth session rebound in seven sessions from its highest since April 25 as the US dollar index rose to its highest since January 3, according to the inverse relationship between them Amid a lack of economic data on Monday by the US economy, the world's largest economy, as markets look to launch the third round of US-China trade talks later this week in Beijing.

Gold futures for April delivery fell 0.21% to currently trade at $ 1,315.40 an ounce, resuming a 10-month high against the opening at $ 1,318.10 an ounce, amid a rally in the US dollar 0.06% to 96.70, showing the longest daily gain since November of 2016 compared to the opening at 96.66.

Investors are looking forward to what Federal Open Market Committee (FOMC) member and Federal Reserve Governor Michael Bowman will speak at the annual conference of the American Association of Community Bankers in San Diego, coming hours before Federal Reserve Governor Jerome Powell delivered a speech on Tuesday entitled " Economic Development in High-Poverty Rural Communities "at the Hope Foundation Rural Policy Forum in Mississippi.

Otherwise, attention is drawn to what will be the outcome of the third round of trade talks between the world's largest economists, with US Treasury Secretary Stephen Manuchen and US Trade Representative Robert Laetzer heading to Beijing later this week to resume trade talks amid efforts Made by both parties to avoid the outbreak of trade war.

US President Donald Trump said last Thursday that he did not intend to meet with Chinese President Xi Jinping before the March 11 deadline for a trade deal between Washington and Beijing, which renewed the markets' concern about the return of tariffs and lifting them if they do not. To reach an agreement on extending the ongoing armistice currently in place between the parties.

In another context, we have followed the former Federal Reserve, Janet Yellen, recently said that she expects the Fed's next move on interest rates to be the cut, especially if the slowdown in global economic growth harms the US economy, explaining that the decision to cut interest rates will be available In that case, adding that if the damage grows, the Fed will return to quantitative easing policies again.

Federal Reserve monetary policy makers kept interest rates at 2.25% to 2.50% last month while continuing to cut bond purchases by $ 50 billion a month. Federal Commissioner Jerome Powell said that the committee would be patient and monitor economic data as the downside risks to the economy worsened as global growth and financial market volatility weakened. Whether that approach continued or not would depend on economic data.

On the other hand, the statistics of the World Gold Council at the end of last month to the rise of purchases of global central banks of gold in 2018 to their highest level since 1967, where purchases rose to 651.5 metric tons, up 74% from what it was in 2017 when it reached (374 metric tons), with the demand of many countries to purchase the yellow metal topped by Russia by 274 metric tons, which surpassed China, the world's largest consumer of metals, and inspire both Poland and Kazakhstan.

Global gold consumption rose to 4,345.1 metric tons last year from 4,159.9 metric tons in 2017. Retail investment in bullion and gold coins rose 4 percent to 1,090.2 metric tons, supported by Iran's demand increase of 222 percent to 62 metric tons, Demand for jewelry has stabilized at around 2,200 metric tons with increased consumption compensation in both China, the United States and Russia for lower demand from the Middle East and India.

In contrast, the demand for financial institutions fell by 67% from the year 2017, when the world supply of gold increased 1% to a total of 4,490.2 metric tons in 2018. The gold futures contracts last month made the fourth monthly gain, respectively, illustrated Has seen its longest monthly gains since late 2010, after ending its longest monthly loss march since late 1996.

Technical Analysis

The price of gold is starting to show negative negative trading with the opening of the day, stimulated by the stochastic cross, now awaiting further downside during the coming sessions, with the next targets at 1297.00 then 1286.70.

The price movement between the 20-50 moving averages is in a sideways movement within the descending sub-channel where the SMA 50 is a resistance level

Stability below 1316.65 is important for the continuation of the suggested bearish trend, as breaching it will open the door to extend gold gains to reach 1340.00 and then 1365.05 in the near term.

The trading range for today is among the support at 1286.00 and resistance at 1320.00

Support and resistance:

Support: 1309.20-1301.30-1294.67

Resistance: 1316.52-1321.47-1333.80

The general trend for today is bearish