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XAUUSD Quotes Failed to Consolidate at the August Highs

9/7/2022 12:05 PM

Gold prices are moderately declining, developing the "bearish" momentum formed the day before. The XAU/USD pair failed to consolidate on Tuesday at its local highs of August 30, reacting to the publication of positive macroeconomic statistics from the US.

In particular, the data showed an increase in ISM Services PMI in August from 56.7 points to 56.9 points, while analysts had expected it to decline to 55.1 points. At the same time, S&P Global Services PMI fell in August from 45.0 points to 44.6 points with neutral forecasts. One way or another, investors are confident in the stability of the US economy, especially against the background of the energy crisis and recession risks in Europe.

Today, the publication of a monthly report from the US Federal Reserve, the so-called "Beige Book", is expected. In addition, the Bank of Canada will announce its decision on interest rates. Forecasts suggest an increase in value immediately by 75 basis points to 3.25%. Tomorrow, the European Central Bank (ECB) will also hold a meeting on monetary policy and it is assumed that the regulator will adjust interest rates by 50 basis points to 1.00%.

The downtrend in demand for gold, which began in early August, is still observed. According to the report of the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in the precious metal corrected from 125.8 thousand to 117.7 thousand, thus, the tendency for sellers to reduce their positions continues. "Bears" still hold the lead in market positions, but the number of positions of "bulls" has also significantly adjusted, amounting to 21.925 thousand against 53.688 thousand for sellers. This week, buyers liquidated 0.615 thousand contracts, while sellers liquidated 2.989 thousand.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range widens marginally, following the resumption of "bearish" momentum in the ultra-short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic is reversing downwards after a short rise at the end of the last trading week, indicating the risks of the development of "bearish" dynamics in the nearest time intervals.

Resistance levels: 1700.00, 1720.00, 1730.00, 1752.87. | Support levels: 1688.58, 1675.00, 1660.15, 1644.36.

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