XAU/USD: gold is losing investors' interest

Current trend

Gold is losing positions against USD again in view of outflow of investments. In the previous month the metal lost over 71 dollars in price, and the fall continues.

The main catalyst for the fall of the quotes was the growth of the rate of USD in view of FOMC decision to increase the key interest rate and favorable comments by Janet Yellen on the prospects of economic growth in the near future. Moreover the statements by the representatives of the Bank of England and European Central Bank about possible winding up of stimulation measures and increase of interest rates in the near future also put pressure on gold. Investors are more eager to pay for the weakened USD expecting it to grow in the medium term.

In the end of this week attention should be paid to the US labor market.

Support and resistance

In the medium term investors’ interest to low-risk assets is expected to fall, which indicates that the price is to consolidate in the downward channel. The price may meet a considerable obstacle at local minimums of the current year: 1214.50, 1195.10, 1180.45. From them the pair XAU/USD may demonstrate long upward correction.

Technical indicators confirm that the pair may consolidate in the downward channel: MACD indicates rapid growth of volumes of short positions, and Bollinger Bands have revered downwards.

Support levels: 1218.60, 1214.50, 1206.50, 1201.50, 1195.10, 1186.50, 1180.45.

Resistance levels: 1234.00, 1241.75, 1278.15, 1254.75, 1267.40, 1280.90, 1292.30.

Trading tips

In the short terms sell positions may be opened from the current level and short pending orders may be placed from the level of 1234.00 with target at 1195.10. Stop-loss may be placed at 1.2320.