Gold prices are slightly declining, retreating from local highs of October 13, updated at the end of last week after the publication of the October report on the US labor market, which became a catalyst for strengthening the rates of the main competitors of the American currency. The XAU/USD pair also reacted positively to the growing risks that the US Federal Reserve will reconsider its further monetary policy in the direction of easing. However, investors are still not sure about this, expecting new drivers to appear this week.
The focus of the market is the publication of the results of the US midterm elections, as well as statistics on consumer inflation for October, which will appear on Thursday. Recall that analysts expect a slowdown in consumer price growth in annual terms from 8.2% to 8.0%, and in monthly terms a noticeable increase in the indicator by 0.7% after rising by 0.4% in September is expected. If the forecasts come true, this will be another signal for the US regulator not to rush to further increase the interest rate. Currently, about 57% of analysts predict a 50 basis point correction at the December meeting.
In the meantime, the market continues to trend towards the liquidation of deals. According to the report of the US Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in gold amounted to 64.6 thousand against 68.0 thousand a week earlier. "Bears" still hold the lead in terms of the number of contracts, and their balance with swap dealers is 158.634 thousand against 98.254 thousand with "bulls". This week, sellers have liquidated 0.372 thousand deals, while buyers have increased their number by 2.816 thousand.
Bollinger Bands in D1 chart show moderate growth. The price range practically does not change; however, it significantly limits the potential for the development of a "bullish" trend in the short and ultra-short term. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic retains an upward direction but is located in close proximity to its highs, which indicates the risks of overbought gold in the ultra-short term.
Resistance levels: 1675.00, 1688.58, 1700.00, 1720.00. | Support levels: 1653.92, 1637.69, 1616.42, 1600.00.