Gold Updates by Solid ECN

[SOLIDECN]

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.

[/JUSTIFY]

 

[Solid ECN]

XAUUSD, the instrument rushed to local lows
Gold prices are consolidating near the level of 1865 after an attempt at corrective growth the day before, which did not allow XAUUSD to consolidate on new local lows from February 16. The pressure on quotes is exerted by the growth in the yield of US Treasury bonds: the indicator for 10-year bonds last Monday exceeded 3% for the first time since December 2018 and remains in this area at the present time.

The investment attractiveness of the precious metal is decreasing before the start of the US Federal Reserve's meeting on monetary policy, which will be held today at 20:00 (GMT+2). US officials are expected to raise interest rates by 50 basis points at once, and also announce the launch of a quantitative tightening program, which should help to reduce the almost 9 trillion dollars balance sheet. Higher short-term interest rates and US bond yields tend to increase the opportunity cost of holding zero-yield bullion.

This week, the Bank of England will also hold a meeting on monetary policy, which will allow it to maintain parity, but the European Central Bank (ECB) again looks somewhat apart from this background. The regulator has not officially announced plans to tighten monetary policy, but its representatives have repeatedly spoken out in favor of such a scenario. In particular, Isabelle Schnabel, a member of the executive board, commenting on the problem of growing inflation in the region, noted that she allows the launch of a program of gradual rate increase as early as July this year.

On the daily chart, Bollinger Bands are steadily declining. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD is also decreasing, maintaining a relatively strong buy signal, being located below the signal line. Stochastic, having demonstrated an unsuccessful attempt at corrective growth is again reversing into a downward plane, still indicating the risks of the instrument being oversold in the ultra-short term.

 

[SOLIDECN]

On the daily chart, the development of the third wave of the higher level (5) of 3 continues, in which wave 3 of (5) has formed. At the moment, there is a downward correction as the fourth wave 4 of (5), within which wave c of 4 is being formed.

If the assumption is correct, after it is finished, the growth of XAUUSD will continue to the levels of 2100 - 2200. The level of 1827.33 is critical and stop-loss for this scenario.

 

[Solid ECN]

Gold prices show moderate corrective growth, consolidating after an active decline yesterday, returning the XAU/USD pair to the local lows of May 3. Currently, the instrument is testing 1860, receiving support from technical factors.

The strengthening dollar and the growth in the yield of US Treasury bonds put pressure on the positions of the metal. Thus, the underlying 10-year securities reached 3.185%, which is the highest level since November 2018, but now, it has corrected to the area of 3.040%, while the USD Index exceeded the high of December 2002 at 104.120, but now it has fallen to 103.590. Also, last week, the US Federal Reserve expectedly increased interest rates by 50 points to 1.00% and announced the start of a phased reduction in its balance sheet. In subsequent comments, the head of the regulator, Jerome Powell, dispelled reports that in the future, officials could accelerate the pace of monetary tightening and, for example, adjust the rate by 75 percentage points. Against this backdrop, gold quotes are supported by the prospects for continued growth in consumer inflation in the US during the current quarter, although it has already reached its highest level in 40 years, around 8.5%. Tomorrow, American investors will be watching the April statistics, which may show the first signs of weakening. In particular, it is assumed that the consumer prices will be only 0.2% MoM after rising by 1.2% for March and may fall 8.5% to 8.1% YoY.

Bollinger Bands show a moderate decline on the daily chart: the price range narrows, reflecting the emergence of ambiguous trading dynamics in the short term. MACD falls, keeping a poor sell signal below the signal line. Stochastic falls close to its lows, indicating that instrument may become oversold in the ultra-short term.

Resistance levels: 1877.83, 1900, 1930, 1952.53 | Support levels: 1850.2, 1823.09, 1800, 1760.74

 

[SOLIDECN]

XAUUSD, the pair is in a correction and may grow.​

On the daily chart, the fifth wave of the higher level (5) of 3 develops, within which the wave 3 of (5) formed. Now, a downward correction is ending as the fourth wave 4 of (5), within which the development of the wave c of 4 is ending.

If the assumption is correct, after the end of the correction, the pair XAUUSD will grow to the levels of 2070.42 - 2200. In this scenario, critical stop loss level is 1770.2.

 

[SOLIDECN]

Quotes of XAU/USD are under pressure from "hawkish" rhetoric from the US Federal Reserve and high prospects for the continuation of an aggressive monetary policy at the June meeting, in particular, a sharp increase in the rate by another 0.50%. The "bearish" momentum is expected to push gold prices towards psychological support at 1800. In addition, investors have become more inclined towards risky assets, redirecting their capital from protective ones, which also puts pressure on quotes, while the fundamental picture changes slightly.

Pressure on the position of gold is also exerted by the rising dollar, which is supported by technical factors and high yields on US Treasury bonds. However, the deteriorating economic outlook and the ongoing conflict in Eastern Europe are giving the precious metal some support. At the first sign that central banks will ease their "hawkish" rhetoric, one can expect a noticeable increase in demand for a "defensive" asset.

Among the macroeconomic factors at the beginning of the week, weak Chinese statistics should be singled out, providing additional support to the US currency. Retail Sales in China plunged to a record 11.1% in April after declining 3.5% in March. Analysts had expected a much more modest 6.0% decline.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is expanding from below; however, it fails to catch the surge of the "bearish" sentiment at the moment. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic has been in close proximity to its lows for several days already, which indicates the risks of gold being oversold in the ultra-short term.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1823.09, 1850.2, 1877.83, 1900 | Support levels: 1800, 1775, 1752.87, 1730

 

[Solid ECN]

The precious metal quotes are being corrected in a downtrend, being around 1814 dollars per ounce.

The asset is declining amid fears for global demand due to the coronavirus outbreak in China, which led to serious restrictions. The negative effect on the Chinese economy can be assessed now. Yesterday, industrial production data were published in April, which fell by 2.9% after rising by 5.0% in March. Retail sales fell 11.1%, well above the 3.5% decline in March. Due to the introduced lockdown, the unemployment rate also increased, which amounted to 6.1% compared to 5.8% in March.

According to the Commodity Futures Trading Commission (CFTC), since mid-March, the number of net speculative positions in gold has decreased from 274.5K to 193.3K, and over the last week, the outflow amounted to 5.9K positions. Thus, the overall speculative position in gold is approaching the minimum levels of the middle of last year at 165–175K positions, which indicates an extremely low demand for the metal.

On the daily chart of the asset, the price is moving within the global ascending channel, approaching its lower border. Technical indicators maintain a stable sell signal: indicator Alligator’s EMA fluctuations range expands, and the AO oscillator histogram, having moved into the sell zone, continues to form downward bars.

Resistance levels: 1850, 1917 | Support levels: 1790, 1700​

 

[Solid ECN]

On the daily chart, the fifth wave of the higher level (5) of 3 develops, within which the wave 3 of (5) formed. Now, a downward correction has developed as the fourth wave 4 of (5), within which the wave c of 4 has formed.

If the assumption is correct, the pair will grow to the levels of 2070 - 2200. In this scenario, critical stop loss level is 1785.69.

 

[SOLIDECN]

Gold prices show a slight increase during the morning session, developing a fairly strong "bullish" momentum formed in the middle of last week and trading at 1855.9. The main driver of the instrument's recovery was the weakening USD Index, which sharply corrected from multi-year highs around 105, losing more than 2.5%, to a low of 102, despite the "hawkish" rhetoric of the US Fed members.

Demand for XAU/USD is holding up as global tensions escalate as fundamentals change little. Many economies are facing record inflation amid soaring prices for energy and other resources, forcing investors to look for safer alternatives to risky assets. In turn, rising inflation prompts the world's central banks to sharply tighten monetary policy, making gold ownership less attractive, since it does not generate interest income. Meanwhile, a special military operation in Ukraine continues, and the negotiation process is actually stopped, so the conflict is becoming more and more protracted.

Today, investors are waiting for the publication in the US of May statistics on business activity, as well as April data on the dynamics of New Home Sales. During the day, the Chair of the US Federal Reserve, Jerome Powell, is also scheduled to speak.

Bollinger Bands in D1 chart demonstrate active decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic approached the level of "100" and reversed into a horizontal plane, indicating a strongly overbought instrument in the ultra-short term and signaling in favor of the development of a corrective decline.

Resistance levels: 1877.83, 1900, 1930, 1952.53 | Support levels: 1850.2, 1823.09, 1800, 1775

 

[SOLIDECN]

Quotes of the precious metal are being corrected in a sideways trend, being at around 1845.0.

XAUUSD is holding above the mid-year level at 1800 and, despite the downtrend of the last two months, investments in gold continue to bring income to investors. This can be clearly seen if we compare the dynamics with the main stock markets of the world. The yield of the Dow Jones index over 4 months of this year decreased by 9.63%, the German DAX 30 declined by 12.99%, and the French CAC 40 decreased by 10.97%, while gold over this period increased by 3.75%, which demonstrates that the precious metal performs the function of protecting against fluctuations in financial markets during a period of uncertainty.

According to a report by the US Commodity Futures Trading Commission (CFTC), over the past week, short positions of swap dealers in gold were reduced by 18349 contracts, and this is the largest volume of fixing positions over the past year. In the same period, the number of buy positions increased by 25 thousand, which fully reflects the mood of investors who consider the prospects for strengthening the asset's rate to be very high.

On the daily chart of the asset, the price is trading within the global ascending channel, starting to form a reversal after reaching the global support line. Technical indicators continue holding a sell signal, which is starting to weaken actively: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is forming upward bars being in the sale zone.

Support levels: 1810, 1770 | Resistance levels: 1866, 1917​

 

[SOLIDECN]

On the daily chart, the fifth wave of the higher level (5) of 3 develops, within which the wave 3 of (5) formed, and a downward correction developed as the fourth wave 4 of (5). Now, the formation of the fifth wave 5 of (5) has started, within which the first entry wave of the lower level (i) of i of 5 is developing.

If the assumption is correct, the price will grow to the levels of 2000–2070.42, In this scenario, critical stop loss level is 1785.69.

 

[SOLIDECN]

Gold prices show quite active growth during the Asian session, recovering to the previous local highs, updated last week. The instrument is testing 1860 for a breakout, receiving support from a rather weak dollar. However, the USD Index is up 0.05% intraday at 101.68, rebounding from Friday's monthly low of 101.43, as markets weigh Friday's US data to predict the next move by the US Fed. Demand for gold remains stably high, given that the fundamental picture in the markets is changing slightly. Investors are still watching the development of the Russian-Ukrainian conflict, which has generated many additional risks and does not yet give any hope for a quick improvement in the situation.

The pressure on the US currency increased last week amid the incident in the Persian Gulf. Earlier, the Greek authorities seized a tanker with Iranian oil, after which they handed it over to the United States. Iran responded to this by detaining two Greek tankers, which could lead to a new escalation of tension in the Middle East. At the same time, as monetary policy tightens in various regions, the demand for risk is gradually recovering, putting pressure on "safe" gold.

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range expands from above, freeing a path to new local highs for the "bulls". MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, on the contrary, maintains a confident downward direction and at the moment practically does not react to the resumption of growth.

Resistance levels: 1869.49, 1885, 1900, 1930 | Support levels: 1850.2, 1840.26, 1823.09, 1800

 

[SOLIDECN]

The XAUUSD pair holds above the key level of the previous 1800 and are currently being corrected after a slight increase.

Despite significant fluctuations in world markets, precious metals remain one of the most reliable investments. If traders preferred contracts for gold a year ago, today, buyers are showing particular interest in bullion and coins. According to the US Mint, sales of the most popular American Golden Eagle series in May of this year significantly exceeded previous periods: 200.5K coins or 147K ounces of gold equivalent were sold, significantly higher than 122.5K or 88K ounces sold in April. Also, if we consider the dynamics of sales in May 2021 with a figure of only 20.5K ounces, then the positive trend becomes more and more obvious.

According to the latest report from the US Commodity Futures Trading Commission (CFTC), over the past week, the global downtrend for the precious metal has been reversed, and after six weeks of constant decline, an increase in the number of gold contracts was recorded to 183.8K from 175.4K, which is quite expected, given the sharp outflow of short swap dealers, which was reported a week earlier.

On the daily chart, the price is moving within the global ascending channel, forming a reversal near the global support line. Technical indicators maintain a weakening sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram forms upward bars in the sell zone.

Resistance levels: 1866, 1917 | Support levels: 1810, 1770​

 

[SOLIDECN]

Gold prices are holding around 1840 during the Asian session, trying to correct after a slight decline on Monday. XAUUSD remains under pressure after the release of fairly strong data from the US labor market: employment rose by 390K, which is better than the projected value of 325K, and the Unemployment Rate, instead of the expected decline to 3.5%, remained at 3.6%. The statistics highlighted the stability of the sector and its readiness to cope with the increase in interest rates from the US Federal Reserve, which may contribute to further tightening of monetary policy. In addition, the uptrend in the yield of 10-year US bonds makes the dollar an extremely attractive asset for investment.

An additional negative factor for gold is the current position of the European Central Bank (ECB). The regulator has recently been actively speaking out in favor of raising interest rates in order to curb the sharp rise in inflation. The ECB will meet on Thursday, and some analysts believe that it will announce the start of a reduction in the quantitative easing (QE) program. An increase in the interest rate, according to current forecasts, is possible in Q3 2022, provided that the situation in the markets does not change radically.

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is slightly narrowing from below, reflecting the mixed dynamics of trading in the short term. MACD is declining, forming a new sell signal (trying to consolidate below the signal line). Stochastic shows a slightly more active decline and at the moment does not contradict the further development of the downtrend in the short and/or ultra-short term.

Resistance levels: 1850.2, 1869.49, 1885, 1900 | Support levels: 1823, 1800, 1775, 1752.87

 

[SOLIDECN]

The XAUUSD pair is correcting within a sideways trend, trading at 1850 with no signs of a possible change in the current trend.

Yesterday, the World Gold Council (WGC) published a new report on government stocks from March to April 2022. Thus, Turkey's reserves increased by 6.5 tons to 436.7 tons, Kazakhstan – by 5.3 tons, and the total volume reached 373.4 tons of metal, while Uzbekistan's reserves were replenished by 8.7 tons to 346.2 tons. Only the Philippines should be singled out among the major sellers during this period, which managed to sell 5 tons of the precious metal, reducing the available resources to 151.3 tons.

The data released yesterday by the US Commodity Futures Trading Commission (CFTC) disappointed the experts. According to the report, at the beginning of this month, investors reduced the number of net speculative positions in gold to 172.6K from 183.8K, although a week earlier, the figure for the first time in the last two months increased from 175.4K to 183.8K.

As a result, even with an increased interest in physical gold from the central banks, the demand for contracts from market participants continues to remain low, which does not allow the quotes of the XAUUSD pair to strengthen their positions.

The daily chart shows that the price is moving within the global ascending channel, near the support line. Technical indicators maintain a weakening sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram, being in the sell zone, is forming upward bars.

Resistance levels: 1870, 1917 | Support levels: 1836, 1790​

 

[SOLIDECN]

The pair may grow.​

On the daily chart, the fifth wave of the higher level (5) of 3 develops, within which the wave 3 of (5) formed, and a downward correction developed as the fourth wave 4 of (5). Now, the formation of the fifth wave 5 of (5) has started, within which the first entry wave of the lower level (i) of i of 5 has formed, and the correctional wave (ii) of i of 5 is developing.

If the assumption is correct, after the end of the correction, the XAU USD pair will grow to the levels of 2000 – 2070. In this scenario, critical stop loss level is 1785.69.

 

[SOLIDECN]

Gold prices show a corrective decline, retreating from their local highs from May 9, updated at the beginning of the week. Investors are taking profits on long positions opened last Friday, when the demand for XAU/USD increased again after the publication of multidirectional macroeconomic statistics on inflation in the US. The released data showed an acceleration of the indicator in May to 8.1%, which was a new record high since December 1981. On a monthly basis, the country's Consumer Price Index accelerated from 0.3% in April to 0.7%, and the Core CPI excluding Food and Energy, slowed down to 6.0% from 6.2%, which is quite obvious, because the reason for the current negative dynamics in the United States is the rise in energy prices.

In turn, the revision of inflation data is likely to lead to a more aggressive policy of the US Federal Reserve, aimed at tightening monetary conditions. In particular, the regulator may decide to either raise interest rates more quickly, for example, by 75 basis points at once, or continue the planned correction of the value after two meetings in June and July. Earlier it was assumed that officials would take a break after two rate hikes in the summer, to assess the impact of the measures taken on the economy and consumer price growth.

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is expanding; however, it fails to catch the surge of last week's "bearish" sentiments. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its highs, indicating the risks of overbought instrument in the ultra-short term.

Resistance levels: 1869.49, 1878.84, 1900, 1920 | Support levels: 1850.20, 1823.09, 1800, 1775

 

[SOLIDECN]

XAU USD, demand for gold remains low​

XAU USD is correcting sideways, trading at 1830 and showing no signs of a trend reversal. Gold quotes are in a rather narrow range of 1800 – 1880, having shown a slight increase the day before after the decision of the US Federal Reserve to raise the interest rate from 1.00% to 1.75%, which indicates the market's inability to calculate the consequences of the actions of the American regulator.

In any case, even a local increase in quotes does not mean a global change in trend, which remains negative. This clearly demonstrates the ratio of the positions of sellers and buyers on the stock exchange. According to the latest report of the US Commodity Futures Trading Commission (CFTC), the balance of contracts continues to remain on the side of sellers and, based on current positions, they hold 71.880K contracts, while buyers retain 23.852K contracts. There is a significantly larger gap in the positions of swap dealers: 83.939K contracts were registered for purchase, and 245.231K for sale. In the previous week, however, the dynamics of the change in the balance was in favor of buyers: they liquidated 3.376K positions, while sellers reduced 4.580K positions. Neither side is building up its assets, suggesting low overall demand for the metal.



On the daily chart of the asset, the price is trading within the local side channel, holding in the middle of the range. Technical indicators are in a quite strong sell signal state: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator is trading in the sell zone, forming descending bars.

Support levels: 1807, 1752 | Resistance levels: 1848, 1895​

 

[SOLIDECN]

Crude Oil - The price may fall

If the assumption is correct, Brent Crude Oil price will fall within the wave c of 2 to the levels of 77.08 – 62.50. In this scenario, critical stop loss level is 139.53.

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[SOLIDECN]

Gold - Quotes are preparing to renew the June maximum​

On the one hand, investors see gold as a proven inflation hedge, but on the other hand, the US dollar is actively gaining in value against the backdrop of the "hawkish" rhetoric of the US Federal Reserve regarding the tightening of the main parameters of the national monetary policy. Last week, the regulator raised the interest rate by 75 basis points to 1.75% and announced its readiness to adjust the rate further if the situation in the economy requires this. The next meeting of the department is scheduled for July 27, and the dynamics of the national currency and the gold rate will depend on its results.

The long-term trend in the XAU USD pair is downwards. Last week, market participants unsuccessfully tested the resistance at 1877, and the price fell to the support level of 1806. After the decision of the US Federal Reserve on the interest rate, the asset strengthened, and at the moment, the trading instrument is in the middle of the corridor 1877 – 1806. If the resistance level of 1877 is broken, then a further increase to 1918 is possible, and in case of the breakdown of the support level of 1806, an update of the May low and a further decrease to the area of 1753 is expected.

The medium-term trend is upwards. Last week, market participants tested the key support at 1807 – 1799. The zone was held, which led to positive dynamics to renew the high of June in the 1878 area.

Resistance levels: 1877, 1918 | Support levels: 1806, 1790, 1753