Gold futures rallied during the Asian session, their highest since April 20 as the US dollar index fell for the second consecutive session from its highest since December 17 according to the inverse relationship between them amid the absence of the US market on Monday because of holiday President's Day in the United States and with the aspiration to complete the China-US trade talks in Washington.
At 04:04 am GMT, gold futures for April delivery fell 0.22% to currently trade at $ 1,328.00 an ounce, the highest in ten months compared with the opening at $ 1,325.00 an ounce, amid the decline of the US dollar index 0.05% to 96.75 levels, showing a rebound from the top in two months compared to the opening at 96.81.
Gold prices continue to benefit from the dollar's slide at the end of last week and earlier this week following disappointing economic data from the world's largest economy, which may later be reflected in the decisions and directions of monetary policymakers at the Fed and following the announcement by US President Donald Trump National emergency, while objecting to insufficient funding for the construction of the border wall with Mexico by Congress.
On Friday, US President Trump signed a US federal government funding bill that blocked his country from a new government closure but objected to Congress allocating $ 1,375 million to the $ 5.7 billion needed to complete the US border wall with Mexico. Prompting him to declare a state of emergency that allowed him $ 8 billion to finance the border wall.
Otherwise, President Trump also noted on Friday that trade talks with China were going very well and that he would be happy to cancel tariffs if the agreement was reached between the world's top economists to avoid a rise in trade protectionism and a trade war. He said that there is a possibility of extending the trade truce between China and China.
On the other hand, Chinese President Shi Jinping also said on Friday that trade talks between his country and the United States will be completed in Washington this week, adding that he hoped that negotiators by the two sides will reach a trade agreement ending the escalation of trade protection expected with the expiration of the truce of trade between his country And the United States by the beginning of next month.
On the other hand, investors are looking ahead to the US economy later this week to reveal the minutes of the Federal Open Market Committee meeting on 29-30 January, during which Fed policymakers kept interest rates at 2.25% And 2.50% as the bond repurchase moves down by $ 50 billion per month.
The Russian Ministry of Economy announced last week that Russia's production of gold rose in the last year 2018 to 314.42 tons compared with 306.9 tons in 2017, less than a month after the World Gold Council's statistics at the end of last month said that Russia Was the most gold-buying country in 2018 as it sought to reduce dependence on the US dollar because of US sanctions.
According to the World Gold Council, global central bank purchases of gold rose during the year 2018 to their highest level since 1967. Purchases rose to 651.5 metric tons, up 74% from 2017 at 375 metric tons, Of the countries to buy the yellow metal topped by Russia by 274 metric tons, which overtook China, the largest consumer of metals globally 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 has breached the 1316.65 level after ending last week's trading above it, aiming to achieve further gains expected over the coming period, consistently within the ascending channel it has been trading since last November supported by SMA 50 and SMA 7 over the medium term.
Stochastic in the overbought area in a sideways path leaving this area will result in a correction towards the MA 7. Noting that our next targets are at 1347.50 and 1365.05. Keep in mind that the continuation of the suggested bullish wave depends on stability above 1305.00.
The trading range for today is among the key support at 1310.00 and resistance at 1347.00.
Support and resistance:
- Support: 1317.24-1313.04-1310.00;
- Resistance: 1332.00-1338.70.
The expected general trend for today: bullish.