27 June, 2019
Gold futures fell during the Asian session to rebound for the second consecutive session from its highest since May 14, 2013 as the US dollar index rebounded from its lowest level since March 20, according to the inverse relationship between them on the eve of developments and data Economic outlook on Wednesday by the US economy, the world's largest economy.
Gold futures for August delivery fell 1.26% to currently trade at $ 1,409.50 per ounce compared to the opening at $ 1,427.20 an ounce. The contracts opened today's trading session with a bullish price gap after it closed. Yesterday's trading at $ 1,418.70 an ounce, as the US dollar index rose 0.11% to 96.28 levels, showing a three-month low from the opening at 96.18.
Investors are currently waiting for the US economy to release the Durable Goods Orders, which account for about half of consumer spending, which accounts for more than two-thirds of US GDP, which could reflect stability at zero levels versus a 2.1% drop in April, While the core reading of the index itself may show a 0.1% growth versus stability at zero levels in April.
This comes in conjunction with the release of the trade balance of goods which may show the deficit shrinking to $ 71.8 billion against $ 72.1 billion in April, and the initial reading of the Wholesale Inventories Index, which may indicate a slowdown in growth to 0.6% from 0.8% This comes hours after Federal Reserve Governor Jerome Powell spoke in New York, limiting opportunities for interest rate cuts by the next meeting.
In his speech on economic and monetary policy at the Council on Foreign Relations, Powell said that many members of the Federal Open Market Committee are expecting expansionary measures, adding that the strength of the economic fundamentals supports the continued pace of growth and employment, And the economy continues to grow, while inflation is at the Fed's target.
Powell also noted that the Federal Commission expects inflationary growth to grow despite inflation stabilizing below 2 per cent. He pointed out that the business and agriculture sectors were concerned by the escalation of trade tensions. He added that the Committee's expectations remained positive despite the increasing uncertainty, While confirming that the Fed is closely monitoring developments in the domestic situation with its full readiness to act appropriately.
Gold is trading strongly today to break the 1420.00 level and settle below it, opening the way for a bearish correction from 1275.00 to 1438.90 and approaching the 23.6% Fibonacci level at 1400.20.
Therefore, we expect the downside movement to continue in the coming sessions, and breaking the above mentioned level will extend the bearish wave to reach 136.6.30 as a next stop, while the expected decline will remain unless it is able to break above 1411.00 - 1420.00 levels and stability above it.
The trading range for today is among the support at 1380.00 and resistance at 1420.00. The general trend for today is bearish.