XAU/USD: a backlash against the "hawkish" rhetoric of the US Fed
Current trend
During the Asian session, the XAU/USD pair is trading flat, consolidating near 1920.00. Yesterday, gold quotes were actively declining in response to the "hawkish" speech of the head of the US Federal Reserve, Jerome Powell.
The official said that the regulator is ready to raise the rate immediately by 50 basis points at one or more of the next meetings and will soon launch a program to reduce the balance sheet, according to the latest estimates, reaching 9T dollars. Also, The Goldman Sachs Group Inc. analysts forecast two adjustments of 50 basis points at once from the next meeting and then four increases of 25 basis points before the end of the year. The "hawkish" tone of Powell's remarks spurred US bonds higher and affected the bond market, with the US dollar index turning sideways around 98.500 amid heightened investor attention to risky assets and the yield on 10-year US Treasury bonds reached 2.81%. Against this background, gold has expectedly declined, although the demand for shelter assets has generally remained very high in recent days.
The metal is supported by the expectations of new packages of EU sanctions against the Russian economy. This week, EU leaders will meet to discuss the fifth package of restrictive measures that could include a broader ban on Russian energy imports. It is worth noting that there is no single position on this issue: Germany opposes a complete ban while not excluding the possibility of finding alternatives.
Support and resistance
On the daily chart, Bollinger bands reverse downwards: the price range expands, remaining quite spacious for the current level of activity in the market. The MACD indicator falls, keeping a strong sell signal (the histogram is below the signal line). Stochastic, on the contrary, keeps a signal for growth, located approximately in the center of its working area and practically not reacting to the appearance of the "bearish" dynamics at the auctions on Tuesday.
Resistance levels: 1930.00, 1952.53, 1974.22, 2000.00.
Support levels: 1900.00, 1877.61, 1860.00, 1840.00.
During the Asian session, the XAU/USD pair is trading flat, consolidating near 1920.00. Yesterday, gold quotes were actively declining in response to the "hawkish" speech of the head of the US Federal Reserve, Jerome Powell.
The official said that the regulator is ready to raise the rate immediately by 50 basis points at one or more of the next meetings and will soon launch a program to reduce the balance sheet, according to the latest estimates, reaching 9T dollars. Also, The Goldman Sachs Group Inc. analysts forecast two adjustments of 50 basis points at once from the next meeting and then four increases of 25 basis points before the end of the year. The "hawkish" tone of Powell's remarks spurred US bonds higher and affected the bond market, with the US dollar index turning sideways around 98.500 amid heightened investor attention to risky assets and the yield on 10-year US Treasury bonds reached 2.81%. Against this background, gold has expectedly declined, although the demand for shelter assets has generally remained very high in recent days.
The metal is supported by the expectations of new packages of EU sanctions against the Russian economy. This week, EU leaders will meet to discuss the fifth package of restrictive measures that could include a broader ban on Russian energy imports. It is worth noting that there is no single position on this issue: Germany opposes a complete ban while not excluding the possibility of finding alternatives.
Support and resistance
On the daily chart, Bollinger bands reverse downwards: the price range expands, remaining quite spacious for the current level of activity in the market. The MACD indicator falls, keeping a strong sell signal (the histogram is below the signal line). Stochastic, on the contrary, keeps a signal for growth, located approximately in the center of its working area and practically not reacting to the appearance of the "bearish" dynamics at the auctions on Tuesday.
Resistance levels: 1930.00, 1952.53, 1974.22, 2000.00.
Support levels: 1900.00, 1877.61, 1860.00, 1840.00.
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