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Gold Prices are Consolidating Near 1750

11/28/2022 10:56 AM

Gold prices are holding near 1750.00, waiting for the publication of new drivers after a slight upward correction last week, when the growth of the XAU/USD pair was largely due to the weakening of the US currency in response to the publication of the November minutes of the US Federal Reserve meeting.

As expected, the released document reflected the expediency of slowing down the rate of interest rate hikes, as the dynamics of consumer inflation shows some downward trend. In addition, the US regulator seeks to minimize risks for the labor market and other sectors of the economy, since a sharp increase in the cost of borrowing has a negative impact on economic growth. One way or another, traders hope that the world economy is overcoming the peak of inflation and now, as the situation stabilizes, it will begin the path to restoring the previous growth rates.

The key indicators for the week will be European data on inflation, as well as statistics on the US labor market for November, which will be released on Friday, December 2. Current forecasts suggest a slowdown in the eurozone Consumer Price Index from 10.6% to 10.4%, while the Core CPI is likely to remain at 5.0%. Investors do not expect much from the US labor market statistics: it is assumed that the number of Nonfarm Payrolls in November will slightly decrease and amount to 208.0 thousand after rising by 261.0 thousand in October, while the Unemployment Rate will remain the same at the level of 3.7%.

Meanwhile, according to the report of the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in gold amounted to 126.3 thousand against 82.3 thousand a week earlier. Sellers still hold the lead in terms of overall positions: their balance with swap dealers is 91.622 thousand for "bulls" against 196.173 thousand for "bears". Last week, sellers added 27.801 thousand contracts, while buyers reduced their number by 3.287 thousand, which indicates the short-term nature of the recent positive momentum.

On the D1 chart, Bollinger Bands are gradually reversing horizontally. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic retains a steady upward direction, but is located in close proximity to its highs, which points to the risks of overbought gold in the ultra-short term.

Resistance levels: 1765.30, 1786.28, 1800.00, 1816.62. | Support levels: 1734.91, 1720.00, 1700.00, 1688.58.

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