The XAU/USD pair is growing for the second week in a row and on the eve reached two-month highs, testing the 1937.50 mark (Murray level [6/8]). The investment attractiveness of gold as a traditional safe haven asset is related to two factors: the actively developing banking crisis and the monetary policy of the US Fed.
Currently, the greatest concern of investors is the lack of bank liquidity, since the bankruptcy of Silicon Valley Bank and Signature Bank may launch similar processes around the world, which will lead to a decrease in lending volumes, a slowdown in business activity and serious pressure on the global economy. There are indeed reasons to fear such a development of events, since negative signals are already being noted in the eurozone, despite the assurances of officials that credit institutions are protected and the financial system is stable. During the week, the shares of UniCredit Group, FinecoBank S.p.A., Banca Monte dei Paschi di Siena and Credit Suisse Group were actively declining, and the last one suffered more than others, and a loan of 50.0B francs allocated by the Swiss Central Bank was needed to save it. In general, despite the efforts of the authorities to stabilize the situation, crisis phenomena in the banking sector are likely to continue to manifest themselves in the near future, forcing investors to turn to more stable assets, including gold.
Current factors add even more uncertainty to the further actions of the US Fed. If at the beginning of the month the market was confident of continuing to raise the interest rate and eventually bringing the indicator to a maximum of 5.75% or even 6.00%, now officials may well abandon their previous intentions in order not to create additional pressure on the economy. Most experts believe that the tightening of monetary policy will continue, but the regulator will adjust the interest rate at a slow pace of 25 basis points.
Currently, the price has lost a number of previously won positions, but the potential of the upward movement has not been exhausted, and its targets may be 1937.50 (Murray level [6/8]) and 1968.75 (Murray level [7/8]). The key for the "bears" is the level of 1875.00 (Murray level [4/8]), consolidation below which will give the prospect of resuming the decline to the area of 1843.75 (Murray level [3/8], the middle line of the Bollinger Bands) and 1812.50 (Murray level [2/8]).
The upward trend in the market persists, which is signaled by the upward reversal of the Bollinger Bands and the growth of the MACD histogram in the positive zone, but the Stochastic reverses down in the overbought zone, not excluding a correction.
Resistance levels: 1937.50, 1968.75, 2000.00. | Support levels: 1875.00, 1843.75, 1812.50.