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XAUUSD, Upward Correction Around 1650

10/17/2022 11:30 AM

Gold prices show a slight increase, consolidating near 1650.00 after a noticeable decline at the end of last week.

Gold quotes again came under pressure after the publication of statistics on inflation in the US: in September, consumer prices added 8.2% after rising by 8.3% in the previous month and turned out to be worse than analysts' forecasts of an increase of 8.1%, while the Harmonized Core CPI for the same period accelerated from 6.3% to 6.6%. This strengthened investors' confidence that the US Federal Reserve will continue raising interest rates and, already during the November meeting, will increase the value by 75 basis points for the fourth time in a row. A number of other leading central banks of the world adhere to a similar policy, since inflationary risks are still extremely high.

The trend to increase the number of positions in the market continues, and last week was the third in a row, when an increase in the number of contracts was recorded. According to the latest report from the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions increased to 94.4 thousand from 88.4 thousand a week earlier. If one pays attention to the balance of sellers and buyers, the "bears" still hold the lead in the positions of swap dealers, the number of which is 169.310 thousand against 91.854 thousand of the "bulls". As for the dynamics, this week the changes affected the buyers more: they liquidated 2.423 thousand, and the sellers got rid of only 0.511 thousand.

In turn, quotes are supported by ongoing geopolitical risks due to the military conflict on the territory of Ukraine, which is still in an acute phase and there are no clear trends towards its diplomatic resolution.

Bollinger Bands in D1 chart show moderate growth. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic shows flat dynamics, being in close proximity to the level of "20", which still indicates the risks of the instrument being oversold in the ultra-short term.

Resistance levels: 1653.92, 1675.00, 1688.58, 1700.00. | Support levels: 1640.00, 1620.00, 1600.00, 1579.25.

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