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XAUUSD Global Trend to Increase the Positions of Sellers

1/17/2023 11:07 AM

Gold quotes are falling during the Asian session, developing the corrective momentum formed the day before, when the instrument retreated from its all-time highs from April 25. The XAU/USD pair is testing 1910.00 for a breakdown, reacting to the growth of the US currency in almost the entire spectrum of the market. The trading volume was lowered yesterday on the occasion of Martin Luther King Day celebration in the USA.

In turn, gold continues to be supported by confirmations that global regulators can ease their "hawkish" pressure in the near future. The US Federal Reserve is expected to raise the interest rate in February by only 25 basis points, after which it is likely to take a wait-and-see attitude to assess the measures already taken. Gradual easing of monetary conditions is also expected from the European Central Bank (ECB) and the Bank of England, as the risks of a recession in the economies have noticeably decreased against the backdrop of easing inflationary pressure and correction in energy prices, especially natural gas.

In turn, statistics from China reflected a slowdown in Gross Domestic Product (GDP) in annual terms in the fourth quarter of 2022 from 3.9% to 2.9%, while analysts expected a correction to 1.8%. In quarterly terms, the economy showed zero dynamics after growing by 3.9%, while the forecast was for a decline of 0.8%.

An active uptrend continues in the gold contracts market. According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in the precious metal amounted to 150.5 thousand against 141.7 thousand a week earlier. "Bears" hold the lead in total positions, the number of which is 226.614 thousand for swap dealers, against 84.097 thousand held by "bulls". Last week, sellers increased the number of contracts by 6.826 thousand, while buyers reduced it by 3.461 thousand, which indicates an increased demand for the asset.

Bollinger Bands on the daily chart show a steady increase. The price range is narrowing from below, indicating the appearance of corrective dynamics at the beginning of the current week. MACD is trying to reverse downwards keeping a buy signal (located above the signal line). Stochastic is showing similar dynamics, retreating from its highs, indicating the risks of overbought instrument in the ultra-short term.

Resistance levels: 1930.00, 1952.53, 1974.22, 2000.00. | Support levels: 1900.00, 1886.46, 1869.49, 1857.27.

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