XAU/USD: the growth of demand on gold is expected

Current trend

In September gold price significantly fell due to the decrease of the investors’ interest to the shelter assets and restoration of the US currency during last two trading weeks. As the pair has crossed the key support levels of 1295.75, 1292.00, it was under pressure. After the breakdown of the levels the traders began to close profitable long positions, and the precious metal was selling actively.

The price has renewed the local minimum and tested the level of 1280.00.

In the end of the current trading seek there will be released a number of key statistics in the USA: GDP, employment market data and Michigan Consumer Sentiment Index, which can affect the pair’s dynamics.

Support and resistance

The pair stays in the downward channel and has some place to decrease to its lower border at the level of 1270.00, afterwards the short upward correction is expected. Despite of the growth of the investment attractiveness of USD after the last speech of the USA Fed’s head, the US currency cannot grow significantly sue to the pressure of the negative fundamental background.

In the middle term the growth of the demand on gold from the nearest support levels, exit of the current channel and the formation of the longer upward wave with the targets at the levels of 1313.50, 1335.00 are expected.

Technical indicators still confirms the downward trend movement, but as Bollinger Bands are widening, the correctional consolidation is possible.

Resistance levels: 1285.00, 1292.00, 1295.75, 1304.50, 1313.50, 1316.15, 1335.00.

Support levels: 1280.00, 1274.00, 1270.00, 1262.00, 1257.50.

Trading tips

It’s better to increase the volume of long positions at the current level in the short term, taking into consideration the long upward correction with the targets at 1313.50, 1316.15, 1335.00, stop loss is 1265.00.