Gold analysis on dated 18-12-2020


Futures contracts for gold prices fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the second session from its highest since the ninth of November amid the bounce of the US dollar index for the second session from its lowest since April 19, 2018 according to the reverse relationship on the cusp of Economic developments and data expected today, Friday, by the US economy, the largest economy in the world, and amid the aspiration for the approval of US lawmakers to stimulate new financial resources.


At exactly 06:09 am GMT, gold futures contracts for next February delivery fell 0.20% to trade at $1,887.60 an ounce compared to the opening at $1,891.30 per ounce, knowing that the contracts started the session on a rising price gap after yesterday’s trading was concluded At $1,890.40 per ounce, with the US dollar index rising 0.15% to 90.02 compared to the opening at 89.88.

Investors are currently awaiting the American economy to release the current account reading, which may reflect the widening of the deficit to the value of $190 billion compared to $171 billion in the second quarter, before we witness the release of the leading indicators reading, which may reflect a slowdown in growth to 0.4% compared to 12.1%. In October, leading to the Fed unveiling the results of US banks’ solvency tests.

We would like to point out that the second round of stress tests includes the results of more than 34 banks in the United States, including the banks that succeeded and failed to pass the tests in the first round, and this comes hours after the expiration of the activities of the Federal Open Market Committee meeting December 15-16 / Last Wednesday, during which interest rates were kept at the lowest ever, between zero and 0.25%.

It is noteworthy that the monetary policy makers at the Federal Reserve pledged last Wednesday to keep the interest on federal funds zero and to move forward with the bond-buying program, which is estimated at $120 billion per month at least, until employment goals are achieved and price stability is achieved, with the disclosure of the expectations of the members of the Federal Committee Growth rates, inflation and unemployment in addition to the future of interest rates for the next three years.

In the same context, the Fed’s forecast for the growth rate of the largest economy in the world during the next year 2021 has been raised to 4.2% compared to the previous quarterly estimates of 4% growth and 3.2% growth from 3.0% in 2022, and the Federal Open Market Committee believes that unemployment rates may reach 6.7% by the end of 2020 compared to September’s forecast of 7.6%, and it may decline to 5% in 2021 compared to previous estimates of 5.5%.

We would like to point out that Federal Reserve Governor Jerome Powell noted on Wednesday during the press conference he held after the end of the Fed’s meeting, that the case for financial stimulus is “very, very strong,” and came amid the market’s aspiration for US lawmakers to approve a new stimulus package to counter the negative repercussions of the severity of the outbreak. The second wave of Corona virus in recent times.

Gold price confirmed the breach of 1875.00 after closing the daily candlestick above it, which supports the continuation of the bullish trend scenario in the intraday and short term, which is organized inside the bullish channel that appears in the image, waiting for a positive stimulus that will push the price to achieve our next targets that extend to 1917.00 and then 1928.60.

The SMA 50 continues to support the suggested bullish wave, keeping in mind that breaking 1875.00 will pressure the price to test 1843.40 areas before any new attempt to rise.

The expected trading range for today is between 1850.00 support and 1920.00 resistance.

The expected general trend for today: Bullish

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