XAU/USD: general analysis

Current trend

Gold continues to trade in a downtrend, the nearest important resistance level is at around 1347.66. If the price consolidates above it, then we can talk about changing the trend.

The dollar is supported by positive statistics from the US. Thus, the ADP indicator, reflecting employment, surpassed the forecast, reaching 234 thousand; business activity index for January also pleased investors: 65.7 points against 64.1. Regarding yesterday’s meeting of the Fed, as economists predicted, the Fed left the interest rate unchanged. The meeting also passed a vote on the approval of Powell for the post of Fed’s head – the next meeting, which will be held in March, will be held under his leadership. According to preliminary forecasts, the probability of an increase in rates is more than 50%, and in the current year it is planned to increase it three times. Given the macroeconomic background, the likelihood of further decline in gold is quite high.

Today, special attention should be paid to secondary applications for unemployment benefits and to an index of business activity in the manufacturing sector in USA.

Support and resistance

Indicator Stochastic is at around 71 and indicates the possibility of further decline in the asset.

Resistance levels: 1343.75, 1347.66.

Support levels: 1335.94, 1332.03.

Trading tips

Short positions can be opened at the resistance level of 1343.75 with a stop loss at 1347.66 and a take profit at 1335.94.

Spot Gold

Buy Sell Spread
1342.67 1342.01 66

Scenario

Timeframe Day’s Range
Recommendations SELL LIMIT
Entry Point 1343.75
Take Profit 1335.94
Stop Loss 1347.66
Support levels 1332.03, 1335.94, 1343.75, 1347.66

XAU/USD: general analysis

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