Gold Updates by "Solid ECN"

Solid ECN

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Mar 3, 2022
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On the daily chart, the third wave of the higher level 3 of (5) develops, within which the wave iii of 3 forms. Now, the third wave of the lower level (iii) of iii is developing, within which the wave iii of (iii) has formed, the correctional wave iv of (iii) has ended, and the development of the wave v of (iii) has started.

If the assumption is correct, the pair will grow to the levels of $2150 - $2200. In this scenario, critical stop loss level is $1894.

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Solid ECN

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Mar 3, 2022
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XAUUSD, flat dynamics in the short term​

Gold prices are consolidating during the Asian session, holding near 1920. The day before, the instrument showed a rather active decline, which was caused by another increase in the attractiveness of the US currency for investors. The US dollar is strengthening amid expectations of further tightening of monetary policy by the US Federal Reserve, which may raise the rate by 50 basis points at once during the May meeting. In addition, the demand for the US currency is growing due to an increase in the yield of treasury bonds: for 10-year securities it rose above 2.55% for the first time since May 2019. Return of asset quotes above 1950 will provide stronger support for gold, which may then rush to last week's highs around 1966.

In turn, the demand for gold as a safe-haven asset remains quite high amid the escalation of the conflict in Ukraine. Traders are disappointed in the negotiation process and no longer expect that the parties will be able to reach a peace agreement in the near future.

It is also worth noting that the London Bullion Market Association (LBMA) and the World Gold Council (WGC) intend to create a blockchain-based database that will allow tracking the origin and movement of gold bars around the world. The initiative is aimed at preventing trading in illegally mined metal. At the moment, the market is recording an increase in the number of bars with counterfeit stamps with logos of large manufacturing enterprises.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short/ultra-short term. MACD is going down, keeping a fairly stable sell signal. Stochastic, having retreated from its highs, shows an active downtrend, signaling in favor of the further development of "bearish" trend in the ultra-short term.

Resistance levels
: 1930, 1952, 1974.2, 2000.
Support levels: 1900, 1877, 1860, 1840.​

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Solid ECN

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Mar 3, 2022
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Gold, Fibonacci levels analysis​

Daily overview
On the daily chart, the price continues to test 1921 (correction 50.0%), and the consolidation below it allows a decline to 1890 (correction 61.8%), 1850 (the area of January highs). However, an ascending fan may prevent negative dynamics. The key "bullish" level is 1951 (correction 38.2%), supported by the middle line of Bollinger bands. Its breakout will give the prospect of further growth to 1990 (correction 23.6%), 2050 (correction 0.0%).

Technical indicators do not give a single signal: Bollinger bands are horizontal, Stochastic reverses upwards, but the MACD histogram decreases in the negative zone.
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Weekly overview
On the weekly chart, the price tested 2033 (correction 0.0%) but is now correcting downwards. A break of 1890 (38.2% ascending fan line) further declines to 1835 (23.6% correction, middle line of Bollinger Bands). Otherwise, the quotes will be able to return to 1990 (upper line of Bollinger bands), 2033.

Technical indicators do not give a single signal: Bollinger bands are directed upwards, Stochastic is directed downwards, and the MACD histogram increases in the positive zone.

Resistance levels: 1951, 1990, 2050 | Support levels: 1921, 1890, 1835​

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Solid ECN

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Mar 3, 2022
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Gold, the pair may grow​

On the daily chart, the third wave of the higher level 3 of (5) develops, within which the wave iii of 3 forms. Now, the third wave of the lower level (iii) of iii is developing, within which the wave iii of (iii) has formed, the correctional wave iv of (iii) has ended, and the development of the wave v of (iii) is starting.

If the assumption is correct, Gold will grow to the levels of $2150 - $2200. In this scenario, critical stop loss level is $1890.

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Solid ECN

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Mar 3, 2022
551
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Gold, rising US Treasury yields are pushing the instrument lower​

Gold prices are developing "bearish" dynamics, testing the level of 1920.00 for a breakdown. XAU/USD builds on the downward momentum that was formed at the end of last week, when the US currency received support after the publication of a strong report on US Non-Farm Payrolls and an increase in Treasury yields amid market expectations of a tightening of the US Federal Reserve policy, which could become a catalyst for raising interest rates soon.

As expected, the economy created a little less than 500K new jobs, but at the same time showed a steady increase in Average Hourly Earnings and a drop in the Unemployment Rate from 3.8% to 3.6% (forecasts suggested a decrease to only 3.7%). Strong data confirmed the likelihood that the US regulator will decide to raise interest rates during its May meeting by 50 basis points at once. At the same time, markets are also reacting with a noticeable increase in the yield of US Treasury bonds: on 10-year securities, it rose to 2.414% on Monday morning after closing at 2.375% at the end of last week.

In turn, gold is still supported by the tense situation around Ukraine. The positive impetus received from the results of the next round of talks between the Ukrainian and Russian delegations in Turkey at the beginning of last week seems to have leveled off after the appearance of new evidence of the aggravation of the situation in certain territories of Ukraine and, in particular, in the Bucha district. Meanwhile, Western countries have announced their readiness to impose new sanctions against the Russian Federation, which threatens to further complicate the situation with rising energy prices. Against this backdrop, gold quotes will continue their uptrend, as investors will redirect their capital to safe-haven assets in order to minimize risks.
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Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is slightly narrowing from above, reflecting ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, after a short rise at the beginning of the last trading week, is again reversing into a horizontal plane. It is necessary to wait for the trade signals from technical indicators to become clear.

Resistance levels: 1930, 1952, 1974, 2000 | Support levels: 1900, 1877, 1860, 1840​

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Solid ECN

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Mar 3, 2022
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Central banks continue selling gold​


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Yesterday, the World Gold Council (WGC) provided a preliminary report on the market state. The organization noted that in the first quarter of 2022, there was a trend for the sale of physical gold from the reserves of central banks, and this is the first period since 2020 when such a trend has been recorded. Most actively in February, metal was sold by such countries as Uzbekistan and Kazakhstan. In particular, Uzbekistan reduced its reserves by 22 tons, and Kazakhstan – by 21 tons, and for it gold reserves became the lowest since 2020. Among the bullion buyers during this period, only India and Ireland were noted, which replenished their stocks by a modest 2.6 tons and 1 ton, respectively.

The US Commodity Futures Trading Commission (CFTC) data confirm the global sell-off trend. According to the report for the last week, the number of positions of buyers secured by money amounted to 84.554K, while the same figure for sellers reached 335.029K. At the same time, the weekly change in positions indicated an increase in sellers' contracts by 772 and a decrease by 5.858K contracts among buyers.
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The price is correcting within the local Triangle pattern on the daily chart. Technical indicators maintain a weakened buy signal: fast EMAs on the Alligator indicator have come close to the signal line, and the AO oscillator histogram has moved into the sell zone, having formed the first bars below the transition level.

Resistance levels
: 1957, 2050 | Support levels: 1900, 1830​
 

Solid ECN

Trader
Mar 3, 2022
551
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Gold, the pair may grow.​

On the daily chart, the third wave of the higher level 3 of (5) develops, within which the wave iii of 3 forms. Now, the third wave of the lower level (iii) of iii is developing, within which the wave iii of (iii) has formed, the correctional wave iv of (iii) has ended, and the development of the wave v of (iii) has started.

If the assumption is correct, the pair will grow to the levels of 2150 - 2200. In this scenario, critical stop loss level is 1890.

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Solid ECN

Trader
Mar 3, 2022
551
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24
38

XAUUSD, gold develops the uptrend​


XAUUSD shows moderate growth during Asian trading, testing the level of 1960 again. The day before, the instrument has already made attempts to consolidate above it, having updated local highs from March 14. Gold prices briefly rose to a monthly high on fears of increased inflationary risks in Europe and the United States, which was the reason for the purchase of the metal, but closer to the end of the Monday afternoon session, the "bulls" lost most of their gains. Financial markets are under pressure from geopolitical tensions and the desire of central banks to tighten monetary policy amid soaring consumer prices and associated fears of a recession. This, in turn, continued to benefit traditional safe-haven assets and pushed spot prices higher into the area of 1958 - 1960. The US dollar is also stable and is hovering around high levels around 100 in the USD Index.

Tomorrow, investors are waiting for the publication of inflation data from the US. Despite a number of active measures taken by the US Federal Reserve to contain it, analysts expect the annual value to accelerate to 8.4% in March. The biggest contributor is likely to come from higher energy prices as commodity markets surged to new record highs due to the sanctions policy against the Russian economy. According to the published minutes of the meeting of the Federal Open Market Committee of the US Federal Reserve (FOMC), the regulator intends to reduce the balance sheet by 95 billion dollars every month, starting from May of this year, and accelerate the rate of interest rate hike to 0.50%. In general, officials are optimistic about changing the current parameters to fight inflation, believing that the US economy is strong enough not to experience a recession in the face of geopolitical tensions.
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Bollinger Bands in D1 chart show moderate growth. The price range is slightly widening slightly but does not conform to the development of the "bullish" sentiment yet. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic is showing similar dynamics; however, the indicator line is approaching its highs, indicating the risks of overbought instrument in the ultra-short term.

Resistance levels: 1,974, 2,000, 2,015, 2,030 | Support levels: 1,952, 1,930, 1,900, 1,877​

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Solid ECN

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Mar 3, 2022
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XAUUSD is correcting upwards at 1973. Yesterday, the World Gold Council (WGC) published a report on the state of the market in Q1 2022, which noted a clear positive momentum for the price of the precious metal.

According to the published report, the main influence on the quotes was the increased demand from ETF funds and private investors. In particular, the volume of gold held by ETF funds increased by 269 tons in the quarter alone compared to data at the end of 2021, which is the most dynamic increase since 2020. In addition, the US Mint noted the increased interest of market participants in bullion gold coins in Q1 2022, with total sales of 518K troy ounces, showing a record pace since 1999.

High demand for contracts is also confirmed by data from the US Commodity Futures Trading Commission (CFTC). According to last week's report, the number of net speculative positions in gold was 245.5K, well above the average of 200K at the end of January this year.

In addition, investors continue to evaluate data on March inflation in the United States, which reflected an increase in consumer prices by 8.5% in annual terms, which is the highest value since December 1981. At the same time, core inflation, excluding food and energy prices, slowed down somewhat compared to the February level. Now the market is waiting for decisive steps from the US Federal Reserve. In particular, the interest rate is expected to be raised by 50 basis points at once at the meeting in May.

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On the daily chart of the asset, the price is correcting within the global rising channel, being near the resistance line. Technical indicators maintain the buy signal: fast EMAs on the Alligator indicator again began to expand the range of fluctuations in the direction of growth, and the histogram of the AO oscillator moved into the buy zone, forming the first bar above the transition level.

Support levels: 1958, 1915 | Resistance levels: 1983, 2050
 

Solid ECN

Trader
Mar 3, 2022
551
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XAUUSD, The pair may grow.

On the daily chart, the third wave of the higher level 3 of (5) develops, within which the wave iii of 3 forms. Now, the third wave of the lower level (iii) of iii is developing, within which the wave iii of (iii) has formed, the correctional wave iv of (iii) has ended, and the wave v of (iii) is developing.

If the assumption is correct, the pair will grow to the levels of 2100 - 2200. In this scenario, critical stop loss level is 1890.45.

gold.png
 

Solid ECN

Trader
Mar 3, 2022
551
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Quotes of XAUUSD have suspended growth and are being corrected down ahead of the May meeting of the US Federal Reserve on monetary policy, where a decision can be made to raise the key rate by 0.50%. Now the asset is trading around 1873.0.

Nevertheless, despite the local decline, gold continues to fulfill its main function of protecting investor capital from depreciation in the face of critically high inflation, which in the US reached 8.5% year on year. It is for this reason that the demand for the asset from the side of large market players continues to be consistently high, and since the beginning of March, ETFs denominated in gold have purchased another 100 tons of metal. Of course, in the context of the "hawkish" policy of the US Fed, XAU/USD is slowly declining, and in the event of a sharp increase in interest rates during the meeting scheduled for May 3, an acceleration of downward dynamics is possible; however, the likelihood that quotes will trade above at 1800 dollars an ounce is also quite high.

Investors' interest in trading the assets of the metal group and, in particular, gold is also confirmed by the data of the US Commodity Futures Trading Commission (CFTC). According to last week's report, the number of net positions backed by money remains in favor of buyers at 180,607 contracts, while sellers have a value of 55,640.

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On the daily chart, the price is correcting as part of a local decline wave, approaching a solid support line located in the area of 1810. Technical indicators have already reversed and issued a sell signal: the fast Alligator indicator EMAs crossed the signal line from above, and the histogram of the AO oscillator moved to the sales area, having formed several bars below the transition level.

Support levels: 1865, 1810 | Resistance levels: 1916, 1978​
 

Solid ECN

Trader
Mar 3, 2022
551
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Quotes of the precious metal are being corrected in a downtrend, being at around 1883.

Investors are showing an active interest in gold as a defensive asset after the freezing of Russia's gold and foreign exchange reserves against the backdrop of sanctions imposed after the start of a special military operation in Ukraine. According to the statistics of the World Gold Council, in Q1 2022, demand increased by 34%, reaching 1.234K tons, while the volume of supply in the same period was fixed at 1.157K tons. Despite the positive statistics, at the moment one can observe a downward correction in XAU/USD, which is caused by the market's expectation of the US Federal Reserve meeting scheduled for May 4 and the tightening of the US monetary policy parameters.

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Additional pressure on the metal comes from its main consumer, China. The outbreak of coronavirus in the country has not yet been contained, and last week there were reports of an increase in the incidence in its capital. Investors are seriously afraid that the authorities may impose quarantine restrictions, similar to those currently in effect in Shanghai (a total lockdown has been introduced in the industrial center, and residents are undergoing daily mass testing for COVID-19). Against this background, according to the data of the National Bureau of Statistics of the People's Republic of China, the index of business activity in the Chinese manufacturing sector in April fell to 47.4 points from 49.5 points, continuing to fall from the psychologically important level of 50 points separating growth from recession. Business activity in the non-manufacturing sector fell even more and amounted to 41.9 points against 48.4 points in March.

Thus, the number of gold contracts decreased to 218.0K from 239.8K a week earlier, according to the US Commodity Futures Trading Commission (CFTC).

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On the daily chart, the price is correcting as part of a local decline wave, approaching a global support line located in the area of 1810. Technical indicators have already reversed and issued a signal to open short positions: fast EMAs on the Alligator indicator continue to expand the range of fluctuations, and the histogram of the AO oscillator, having moved into the sell zone, forms descending bars.

Support levels: 1870, 1810 | Resistance levels: 1916, 1978​