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Last week, the XAU/USD pair declined actively and dropped to 1727.60.

The US dollar strengthened against alternative assets, including gold, amid problems in the European and Chinese economies. A serious increase in inflation in the EU and the UK, as well as a decrease in the volume of energy supplies to the EU and a slowdown in production growth in China against the backdrop of the introduction of quarantine measures, have seriously increased the risks of a global economic downturn and strengthened the dollar as a shelter asset. The US economy has so far been coping with the pressure of rising prices and tightening of the monetary policy of the US Federal Reserve, supported by a strong labor market, although several other industries, such as the construction sector, have begun to slow down. Experts hope the country will avoid a recession, despite the continued increase in rates, making the US currency more attractive for investment.

At the moment, the trading instrument has stabilized, as investors are waiting for the most important event of the week – the speech of the head of the US Federal Reserve, Jerome Powell, at the symposium in Jackson Hole. He is expected to confirm the need for further interest rate adjustments until inflation slows to a 2.0% target and oppose a slowdown in monetary tightening, strengthening the US currency. The slightest fluctuations regarding the continuation of the “hawkish” rate of the regulator may have the opposite effect, in which case the XAU/USD pair will resume growth.

The trading instrument regained its lost position, having risen to 1750.00 (Murrey [4/8]), but for serious growth, it will need to consolidate above the middle line of Bollinger bands around 1769.00, and then the positive dynamics may continue to 1812.50 (Murrey [6/ 8]) and 1843.75 (Murrey [7/8]). If 1732.00 (lower line of Bollinger bands) is broken downwards, a new decrease to 1687.50 (Murrey [2/8]), 1656.25 (Murrey [1/8]) is possible.

Technical indicators do not give a single signal, illustrating the uncertainty of the market: Bollinger bands reverse horizontally, Stochastic is pointing upwards, and the MACD histogram is increasing in the negative zone.

Resistance levels: 1769.00, 1812.50, 1843.75. | Support levels: 1732.00, 1687.50, 1656.25.