XAU/USD: Gold corrects as leading bond yields fall
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendations | BUY STOP |
| Entry point | 2713.0 |
| Take Profit | 2791.0 |
| Stop Loss | 2690.0 |
| Key levels | 2555.0, 2642.0, 2713.0, 2791.0 |
| Alternative scenario | |
|---|---|
| Recommendations | SELL STOP |
| Entry point | 2642.0 |
| Take Profit | 2555.0 |
| Stop Loss | 2670.0 |
| Key levels | 2555.0, 2642.0, 2713.0, 2791.0 |
Current dynamics
The XAU/USD pair retreated from the 2710.0 high under pressure from geopolitical factors and as a result of the fall in yields on the global bond market after the appointment of Scott Bessent, known for his conservative approach, as US Treasury Secretary: the indicator for the most popular 10-year US Treasuries fell from 4.441% to 4.352% over the week. In addition, experts' expectations regarding the easing of monetary policy at the US Federal Reserve's December meeting are changing again: according to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of an interest rate adjustment by -25 basis points is 56.2%, higher than Friday's estimates of 52.7%.
The key factor determining the dynamics of gold is geopolitical tension: for example, Israel continues its operation in Lebanon, and the escalation of the Russian-Ukrainian conflict has forced investors to reconsider their attitude towards safe-haven assets, which is noticeable in the dynamics of demand for gold contracts over the past week, a significant increase in which is confirmed by almost all leading commodity exchanges. According to the CME report, the indicator has been actively increasing since November 21, reaching a maximum of 456.0 thousand transactions on Friday, which is lower than the 602.0 thousand recorded on November 6, but higher than the average value of last week of 310.0-330.0 thousand positions.
Support and resistance levels
On the daily chart, the trading instrument is correcting the support line of the long-term ascending channel 2820.0–2570.0.
Technical indicators are weakening the sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO histogram is forming correction bars just below the transition level.
Resistance levels: 2713.0, 2791.0.
Support levels: 2642.0, 2555.0.
Trading scenarios
Long positions can be opened after the price grows and consolidates above the level of 2713.0 with the target of 2791.0. Stop loss is 2690.0. Implementation period: 7 days or more.
Short positions can be opened after the price declines and consolidates below the level of 2642.0 with the target of 2555.0. Stop loss is 2670.0.
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