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XAUUSD Market Update

11/16/2022 11:43 AM

Gold prices show a moderate decline, retreating from local highs from August 15, updated the day before. The XAU/USD pair is testing 1770.00 for a breakdown, waiting for the publication of new drivers on the market. Demand for the US dollar, which rose markedly the night before after reports of two rockets falling in Poland, is pushing gold quotes down. Traders fear that this could lead to a noticeable escalation of the military conflict between Russia and Ukraine.

Also, the pressure on the position of the instrument is exerted by "hawkish" comments of the representatives of the US Federal Reserve. In particular, at the beginning of the week, Christopher Waller, a member of the Board of Governors of the Fed, said that the interest rate would continue to actively increase until inflation fell to the target threshold of 2.0%. Meanwhile, markets received additional evidence yesterday that the rate is gradually declining: the Producer Price Index in October rose by 0.2%, while analysts expected an increase of 0.5% in monthly terms, and slowed down from 8.4% to 8.0% in annual terms, ahead of experts' forecasts of a decline to 8.3%.

Meanwhile, the market recorded a change in the dynamics of positions on the precious metal. According to the report of the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in gold amounted to 82.3 thousand against 64.6 thousand earlier. "Bears" still keep leadership in general positions and their balance with swap dealers is 168.372 thousand against 94.908 thousand held by "bulls". This week, sellers have significantly increased the number of contracts by 9.738 thousand, while buyers have reduced their number by 3.346 thousand, which indicates that short-term players are distrustful of the current increase in gold prices.

Bollinger Bands in D1 chart show active growth. The price range expands, freeing a path to new local highs for the "bulls". MACD grows, preserving a stable buy signal (located above the signal line). Stochastic has been in close proximity to its highs for a long time, signaling the risks of the instrument being overbought in the ultra-short term.

Resistance levels: 1786.28, 1800.00, 1816.62, 1828.22. | Support levels: 1765.30, 1752.87, 1734.91, 1720.00.

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