Current trend

The XAU/USD pair is showing moderate growth during the Asian session, developing the "bullish" momentum formed at the beginning of the week. The instrument is testing 2520.00 for a breakout, while investors are in no hurry to open new long positions ahead of today's publication of US inflation statistics.

Analysts expect to see a further slowdown in the annual Consumer Price Index in August from 2.9% to 2.6%, with a further 0.2% increase expected in monthly terms, and the Core CPI excluding Food and Energy likely to remain at 0.2% monthly and 3.2% annualized. Any sign of rising inflationary pressure could force the Fed to act more cautiously and finally abandon the alternative scenario, which would involve cutting interest rates by 50 basis points in September. In addition, the question remains open regarding the total number of rate adjustments until the end of 2024.

Further impetus for gold prices is also expected on Thursday, when the European Central Bank (ECB) is expected to announce a 25-basis-point cut in borrowing costs to 4.00%. The level of inflation risks in the EU currently allows the regulator to implement its planned easing of monetary conditions. Inflation data in Germany confirmed the local positive trend: the Consumer Price Index in August fell 0.1%, which led to a slowdown in the annual indicator from 2.3% to 1.9%, the March 2021 low, when the first economic consequences of the COVID-19 pandemic were recorded. The Harmonized CPI fell from 2.6% to 2.0%. Against this backdrop, analysts are also awaiting comments from ECB representatives regarding the regulator’s next steps.

Support and resistance

Bollinger Bands on the daily chart demonstrate flat dynamics. The price range narrows slightly from below, significantly limiting the further development of the "bullish" dynamics in the ultra-short term. MACD is trying to cling to growth, maintaining a weak buy signal (the histogram is located above the signal line). Stochastic grows more steadily but is rapidly approaching its highs, which reflects risks of the overbought instrument in the ultra-short term.

Resistance levels: 2525.00, 2540.00, 2555.00, 2570.00.

Support levels: 2510.00, 2500.00, 2483.64, 2470.00.

Trading tips

Long positions can be opened after a breakout of 2525.00 with the target of 2555.00. Stop-loss — 2510.00. Implementation time: 1-2 days.

A rebound from 2525.00 as from resistance, followed by a breakdown of 2510.00 may become a signal for opening of new short positions with the target at 2483.64. Stop-loss — 2525.00.