Current trend

The XAU/USD pair is moving within the medium-term upward trend. This week, it is holding above the psychologically important level of 2500.00 due to monetary and geopolitical factors.

Expectations of the September rate cut by the US Fed are putting pressure on the American currency, actively weakening against alternative assets. On Friday, the head of the regulator, Jerome Powell, announced the imminent easing of monetary policy due to the slowdown in inflation and the continuing risks of excessive cooling of the labor market. Currently, experts expect that by the end of the year, officials will adjust the cost of borrowing three times by a total of about 100 basis points, which means that the American currency will remain under pressure in the medium term.

On the other hand, geopolitical instability in the Middle East supports the quotes of precious metals. Until recently, investors were expecting a ceasefire in the Gaza Strip but over the weekend, Israel and the Lebanese paramilitary organization Hezbollah exchanged a series of rocket attacks, which put the Middle East peace process into question and forced market participants to turn to gold as a traditional shelter asset.

In these conditions, continued growth of the instrument seems to be the most likely scenario.

Support and resistance

The trading instrument is moving above 2500.00 (Murrey level [8/8]) and may continue to grow to the targets of 2539.06 (Murrey level [ 1/8]) and 2578.12 (Murrey level [ 2/8]). After a breakdown of 2460.94 (Murrey level [7/8]), supported by the middle line of Bollinger Bands, a decline to the area of ​​2421.88 (Murrey level [6/8]) and 2382.81 (Murrey level [5/8]) may follow.

Technical indicators confirm the continuation of the upward trend in the market. Bollinger Bands are directed upwards, the MACD histogram is stable in the positive zone, and Stochastic is reversing at the top of the overbought zone.

Resistance levels: 2539.06, 2578.12.

Support levels: 2460.94, 2421.88, 2382.81.

Trading tips

Long positions may be opened from 2521.00, with the target at 2578.12 and stop loss 2482.00. Implementation period: 5–7 days.

Short positions may be opened below 2460.94, with the targets of 2421.88, 2382.81, and stop loss of 2500.00.