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The XAU/USD pair is declining, correcting after a sharp increase over the past three trading sessions, which allowed the quotes to update the local highs of February 3. At the moment, the asset is testing the level of 1900.00 for a breakdown, being influenced by technical factors.

An upward trend is also observed in Japan, where at a yesterday's auction, gold reached 66.67 for the first time, exceeding last week's figure by 32.0 yen. According to a report from precious metals producer Tanaka Kikinzoku Kogyo KK, the current growth reflects investors' uncertainty about the stability of the US financial system after the failure of two of the country's major banks, Silicon Valley Bank and Signature Bank, as a result of which they seek to redirect their capital into proven and safe-haven currencies. Yesterday, during a press conference, US President Joe Biden said that he would ask Congress to tighten regulation of the industry in order to "minimize the likelihood of a repeat of bank failures". At the same time, the US Federal Reserve and the Treasury Department announced the launch of an emergency support program for credit institutions, which will stimulate the sale of Treasury bonds at par, which will help them build up the necessary liquidity.

In addition, the US authorities hastened to calm the markets, assuring that the depositors of the affected banks will have access to their savings. However, investors are hesitant about the regulator's "hawkish" policy. It is obvious that a further increase in the interest rate will have an extremely negative impact on the stability of individual financial institutions, but the Fed needs to fight high inflation in the country.

Today at 14:30 (GMT+2), market participants will follow the publication of data on the Consumer Price Index: in February, the index may slow down from 6.4% to 6.0% in annual terms, and only a slight correction is expected in monthly terms from 0.5% to 0.4%.

Bollinger Bands on the daily chart show a steady increase. The price range is expanding but it fails to conform to the surge of "bullish" sentiments at the moment. MACD indicator is growing keeping a buy signal (located above the signal line). Stochastic retains a steady uptrend, but is located in close proximity to its highs, which points to the risk of overbought gold in the ultra-short term.

Resistance levels: 1914.44, 1930.00, 1952.53, 1974.22. | Support levels: 1900.00, 1878.84, 1869.49, 1857.27.