Current trend

The XAU/USD pair is correcting in a sideways trend, being at 1859.0.

Gold quotes continue to work out local fluctuations in the USD Index, confirming the inverse correlation of -0.97 points. This situation may continue until historical factors of global growth for the precious metals market appear, one of which may be the beginning of a cycle of lowering interest rates, which the US Federal Reserve has begun to talk about. Thus, in response to the words of the Deputy Chairman of the regulator, Philip Jefferson, about a possible end to the increase in borrowing costs, gold showed active growth.

However, the rate is holding steady for now, with the Chicago Mercantile Exchange (CME) FedWatch Tool indicating an 84.3% chance of interest rates remaining between 5.25% and 5.50% at the upcoming meeting. This means that, first of all, investors will continue to monitor bond yields, which are setting new record highs almost every day: for example, 10-year securities are trading at a rate of 4.640%, which is the highest yield in the last 17 years. In turn, the rate on 3-month bonds is a record 5.528% since 2001.

Support and resistance

On the daily chart, the price is trading within a local downward channel with dynamic boundaries of 1915.0–1800.0, correcting in the direction of the resistance line.

Technical indicators are in a sell signal state, which does not exclude a local increase: fast EMAs on the Alligator indicator are moving closer to the signal line, narrowing the range of fluctuations, and the AO histogram forms new corrective bars, being below the transition level.

Support levels: 1845.0, 1810.0.

Resistance levels: 1880.0, 1915.0.

Trading tips

If the asset continues growing locally and the price consolidates above the local resistance level of 1880.0, long positions will be relevant with target at 1915.0. Stop-loss — 1860.0. Implementation time: 7 days and more.

If the asset continues declining locally and the price consolidates below 1845.0, short positions can be opened with the target at 1810.0. Stop-loss — 1860.0.