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XAUUSD Market Update

12/1/2022 1:37 PM

The XAU/USD pair reached 1780.00 and is preparing to continue the upward trend with the target at 1785.00.

Yesterday, the markets followed the speech of the head of the US Federal Reserve, Jerome Powell, who confirmed the Fed's intention to slow down the pace of monetary tightening starting from the next meeting. Thus, on December 14, the regulator may raise the interest rate by 25.0–50.0 basis points instead of 75.0 basis points, as before. The official stressed that these steps should not be taken as a signal for the end of the "hawkish" course, and the interest rate will remain high for a long time, at least until inflation falls to the target levels of 2.0%. Traders reacted to the rhetoric with sales of the US currency, which, in turn, pushed gold quotes up.

The period of uncertainty continues in the precious metals market. According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, the number of net speculative positions on the asset amounted to 116.1K against 126.3K. "Bears" still hold the lead in positions with swap dealers from 191.153K against 95.880K for "bulls." However, sellers reduced the number of contracts by 5.020K, while buyers increased them by 4.259K, which is more like a corrective dynamic.

The long-term trend is upwards. After the test of support at 1725.00 on November 23, the quotes continued their upward momentum with the target at the November high around ​​1785.00. If it is broken, the positive dynamics may continue to 1806.00, if it is held, a downward correction will begin, within which market participants will be able to consider new purchases of the asset.

The medium-term trend is upwards. Last week, the price unsuccessfully tested the key support around ​​1729.00–1723.00, as a result of which an upward movement began towards zone 3 (1793.00–1787.00), in case of breakdown of which, zone 4 (1850.00–1844.00) will become the next target. Key support remains at 1729.00–1723.00.

Resistance levels: 1785.00, 1806.00, 1877.00. | Support levels: 1725.00, 1680.00.

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