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Gold is constrained in a narrow range

Gold is trading in a narrow range on Friday. Investors reacted rather calmly to weak macroeconomic statistics from China.

According to the National Bureau of Statistics, in July the volume of investments in fixed assets decreased by 1.6%, after -3.1% in June. Industrial production increased by 4.8%, against the forecast of + 5.1%. Unexpectedly weak data came out on retail sales. On an annualized basis, the sales volume decreased by 1.1%, against the forecast of + 0.1%. In general, the report came out worse than the market expectations, slightly reducing investors' appetite for risk.

The US dollar has a positive impact on gold, since the beginning of the day, the dollar index dipped by 0.15%. Investors are responding to the suspension of negotiations in Congress on a new package of economic stimulus measures, as well as reports of more than 56 thousand new cases of COVID-19 infection registered in the United States per day (maximum in the last 4 days). Against the backdrop of a declining dollar and political disagreements in the United States, gold is once again becoming a more attractive asset for investment.

Today in the US, the focus will be on the retail sales report. The data will show the extent to which the new wave of coronavirus affects consumer activity in the United States.

Regarding the chart, the price went up from the range of 1921.00-1950.00, but so far it cannot consolidate higher and continue to grow. Most likely, the price will return in the range today and continue trading in it. It is worth expecting a continuation of the bullish movement after the price fixes above the level of 1950.00.

Resistance levels: 1950.00, 1995.00, 2030.00;

Support levels: 1919.00, 1875.00, 1850.00.

The main scenario - a decline to 1919.00.

An alternative scenario - a consolidation above 1950.00 and growth to 1977.00.

The current fundamental outlook is neutral. We consider shorts from the level of 1962.00.

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