After a long trading session in the ascending sloping channel, the XAU/USD pair managed to break out of it and continue moving with the target at the June high of 1877.00.
Analysts predict a rapid growth of precious metal quotes this year up to 4.0 thousand dollars per ounce due to the ongoing policy of tightening monetary incentives by the world's leading central banks. In addition, some of them believe that economies may face a recession as early as the first quarter, and gold as a traditional safe-haven asset will regain its leading position among competitors amid market uncertainty and record inflation. Interest from investors is confirmed by the statistics of the World Gold Council, according to which central banks purchased 400.0 tons of gold in the third quarter of last year, which is almost double the previous record of 241.0 tons set in the third quarter of 2018. According to the US Commodity Futures Trading Commission (CFTC), major players increased their net long position in gold by 1.898 thousand contracts to a new 6-month high of 58.452 thousand contracts.
From the point of view of technical analysis, the current growth of quotes looks quite logical: after the breakdown of the level of 1806.00 at the end of December, the levels of 1877.00 and 1918.00 became new purchase targets. The immediate support is shifting to the area of 1806.00-1785.00, from where one can consider new long-term long positions on the asset. The RSI indicator is approaching the overbought zone, but at the moment it does not reach it, which leaves an opportunity for new purchases of the instrument.
As part of the medium-term uptrend, the XAU/USD pair has reached the target zone 4 (1850.00–1844.00), and if the price consolidates above it, then the next target will be 1907.00–1901.00. The key trend support is shifting to the area of 1795.00–1789.00. If the price is corrected in this area, traders will have the opportunity to consider long positions with the first target at the high of the current week at 1858.00.
Resistance levels: 1877.00, 1918.00. | Support levels: 1806.00, 1785.00.