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Investors are Actively Redirecting Capital Into Gold

8/2/2022 3:09 PM

XAU/USD is correcting at 1774.0 amid strengthening of the downtrend of the US dollar, which fell from 108.000 to 105.000 in the USD Index, acting as a catalyst for the movement of capital into safe-haven assets.

Swap dealers have seen a record liquidation of short positions since the week before last, and the continuation of this trend may mean that the trend in gold is likely to change soon. The report of the US Commodity Futures Trading Commission (CFTC) also showed a decrease of 5.153K contracts in this category, which significantly reduced the difference in the accumulated positions. Now buyers have 92.205K contracts, and sellers have 174.234K contracts.

The situation on the gold market is developing in such a way that the balance of sellers and buyers may soon change in favor of the latter. At the very least, the number of general speculative positions backed by money obviously slowed down the decline: if in early July they were adjusted by an average of 15.0-20.0K contracts per week, last week the reduction was only 2.3K contracts.

On the global chart of the asset, the formation of a wide descending channel with dynamic boundaries 1780.0–1650.0 continues, and now the price is making its first attempt to overcome the resistance line. Technical indicators weaken a sell signal: fast EMAs on the Alligator indicator have almost approached the signal line, and the AO oscillator histogram is forming upward bars, approaching the transition level.

Support levels: 1753.0, 1696.0. | Resistance levels: 1787.0, 1847.0.

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