XAU/USD: gold prices are actively corrected
Current trend
Gold prices are developing a corrective downtrend during the morning session, updating local lows from March 4 and rapidly retreating from their record highs, the growth to which was provoked by Russia's special military operation in Ukraine. Now, the demand for risky assets is gradually recovering, as traders are counting on significant progress in the negotiation process and some stabilization of the global economy if, after a truce is reached, part of the blocking sanctions against the Russian Federation are lifted.
In turn, the development of "bearish" trend in the asset is supported by the strengthening of the US dollar on the eve of the US Federal Reserve meeting scheduled for Wednesday. Current market forecasts suggest a 25 basis point hike in interest rates, marking the welcome start of a monetary policy adjustment cycle. In the latest commentary by the Chairman of the department, Jerome Powell, he mentioned multiple increases in rates this year, taking into account rising inflation, which, in turn, will become a catalyst for strengthening the national currency. At the same time, the yield on 10-year US Treasuries has already risen by 13 basis points, hitting a 32-month high, and the UK gold rate has corrected to its highest level since 2018.
As for macroeconomic statistics from China, it turned out to be positive: Retail Sales in February increased by 6.7% after rising by 1.7% in the previous month, while analysts had expected a 3.0% increase.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowed, being spacious enough for the current activity level in the market. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic retains a steady downtrend but is located in close proximity to its lows, which indicates the risks of oversold gold in the ultra-short term.
Resistance levels: 1952.53, 1974.22, 2000.00, 2015.30.
Support levels: 1918.04, 1900.00, 1877.61, 1860.00.
Gold prices are developing a corrective downtrend during the morning session, updating local lows from March 4 and rapidly retreating from their record highs, the growth to which was provoked by Russia's special military operation in Ukraine. Now, the demand for risky assets is gradually recovering, as traders are counting on significant progress in the negotiation process and some stabilization of the global economy if, after a truce is reached, part of the blocking sanctions against the Russian Federation are lifted.
In turn, the development of "bearish" trend in the asset is supported by the strengthening of the US dollar on the eve of the US Federal Reserve meeting scheduled for Wednesday. Current market forecasts suggest a 25 basis point hike in interest rates, marking the welcome start of a monetary policy adjustment cycle. In the latest commentary by the Chairman of the department, Jerome Powell, he mentioned multiple increases in rates this year, taking into account rising inflation, which, in turn, will become a catalyst for strengthening the national currency. At the same time, the yield on 10-year US Treasuries has already risen by 13 basis points, hitting a 32-month high, and the UK gold rate has corrected to its highest level since 2018.
As for macroeconomic statistics from China, it turned out to be positive: Retail Sales in February increased by 6.7% after rising by 1.7% in the previous month, while analysts had expected a 3.0% increase.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowed, being spacious enough for the current activity level in the market. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic retains a steady downtrend but is located in close proximity to its lows, which indicates the risks of oversold gold in the ultra-short term.
Resistance levels: 1952.53, 1974.22, 2000.00, 2015.30.
Support levels: 1918.04, 1900.00, 1877.61, 1860.00.
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