XAU/USD: gold prices are in consolidation

Current trend

On Friday gold prices fell, but stayed around highs, renewed on November, 17, due to the correctional moods and closing profitable positions after the significant growth of November, 22. The further fall was prevented by weak positions of USD, which is still unsupported. Gold is under pressure of the USA Fed’s interest rate growth on December meeting anticipation, however, the recent minutes, published in the middle of the last trading week, were seen by the investors as “dovish”.

Support and resistance

On the daily chart Bollinger Bands are trying to reverse into flat. The price range is moderately widening, but is still quite narrow, taking into consideration the volatility level. It’s better to use channel trading strategy.

MACD is growing, keeping a weak buy signal (the histogram is above the signal line). It’s better to keep current long positions in the short or very short term, but its’ better to wait before opening new ones until new signals appear.

Stochastic has reversed into flat near the level of 80, which is the formal border of the overbought area. The correctional fall formation is possible in the short term.

Resistance levels: 1292.00, 1296.52, 1300.00.

Support levels: 1288.07, 1283.77, 1279.72, 1276.26.

Trading tips

Long positions can be opened after breakout of the level 1292.00 with the target at 1300.00 and stop loss at 1283.77. Implementation period: 2 days.

Correctional short positions in the short term can be opened after breakout of the level 1283.77 with the targets at 1276.26 or 1272.14 and stop loss at 1290.00. Implementation period: 2-3 days.