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XAUUSD Consolidation at Local Lows

8/30/2022 11:51 AM

Gold prices are consolidating around 1735.00.

Quotes of XAU/USD showed a moderate decline the day before, having updated local lows from July 27, but closer to the end of the daily session, the "bulls" managed to win back almost all the losses. So far, such growth can only be called corrective, since there are no noticeable prospects for the development of upward dynamics for the instrument. The positions of the precious metal remain under pressure amid investors' expectations of a more active increase in interest rates by the world's leading central banks in September, in particular, the US Federal Reserve. Last Friday, the Chair of the US regulator, Jerome Powell, confirmed the Fed's readiness to tighten monetary parameters at a record pace, which led to a revision of analysts' main forecasts. Now the market is inclined to expect a third correction of the value by 75 basis points.

This week, the US will release macroeconomic statistics, the centerpiece of which will be the August report on the labor market, which will be published on Friday. Among other things, analysts expect a sharp slowdown in the growth in Nonfarm Payrolls from 528.0 thousand to 285.0 thousand, as well as a slight decrease in the Average Hourly Earnings from 0.5% to 0.4%.

After a jump in demand for gold contracts at the beginning of the month, no noticeable dynamics were recorded last week. According to the report of the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions decreased from 141.2 thousand to 125.8 thousand; however, given the balance of sellers and buyers, this rebound is unlikely to have a negative impact on the further movement of the asset. Despite the fact that sellers still hold the lead in money-backed contracts, the positions of buyers have not been weakening for more than a month, amounting to 22.539 thousand contracts against 56.677 thousand contracts of sellers. This week, the "bulls" liquidated 0.099 thousand positions, and the "bears" liquidated 2.739 thousand positions.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, having reversed downwards at the end of last week is again rapidly approaching its lows, indicating the risks of the instrument being oversold in the ultra-short term.

Resistance levels: 1752.87, 1765.30, 1775.00, 1784.31. | Support levels: 1730.00, 1720.00, 1700.00, 1687.15.

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