The XAU/USD pair is correcting within a downtrend at 1877.0.
Yesterday, gold quotes recorded the most significant drop since last June, dropping by 90.0 dollars from 1950.0 to Friday's low at 1860.0, the key driver of which was the growth of the US dollar from 101.500 to 102.900 in the USD Index against the background of a strong report on the US labor market. Investors perceived the movement as a local correction, which will not receive a serious continuation since the fundamental global background does not contribute to the decline in the asset: according to the report for 2022, global demand for gold amounted to 4.741K tons, which is an absolute record since 2011. Most of the positive momentum came from central banks' purchases, which mostly wished to remain anonymous. According to experts, regulators thus hope to protect themselves from possible sanctions, providing strong support for national economies.
The investment demand for the precious metal in 2022 has renewed the record: the indicator for gold coins and bars was recorded above 1.200K tons, which is the maximum value over the past ten years and significantly exceeds the 2020 value of 0.904K tons.
On the daily chart, the trading instrument is correcting, keeping around the support line of the rising corridor.
Technical indicators weaken the buy signal: fast EMAs on the Alligator indicator are approaching the signal line, narrowing the range of fluctuations, and the AO histogram forms downward bars in the buying zone.
Resistance levels: 1900.0, 1960.0. | Support levels: 1860.0, 1800.0.