XAU/USD: gold prices are developing a downward trend in the short term 27.09.2023
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NPBFX offers the latest release of analytics on XAU/USD for a better understanding of the current market situation and more efficient trading.
Current trend
The XAU/USD pair is showing a slight decline, extending the short-term downward trend formed last week when the instrument retreated from local highs from September 1. At the moment, quotes are testing 1900.00 for a breakdown, updating local lows from August 22 amid expectations of further tightening of monetary policy by the US Federal Reserve. Thus, last week, representatives of the regulator spoke in favor of continuing to increase the interest rate, taking into account the fact that the economic situation in the country will remain fairly stable. At the beginning of the week, Minneapolis Federal Reserve Bank (FRB) President Neel Kashkari also admitted the possibility of another 25 basis point increase before the end of this year, which led to an increase in the yield on 10-year US Treasury bonds to 4.566%.
Earlier, the World Gold Council's August report recorded a positive trend in the first half of the year, supported by robust demand for jewelry. Thus, purchases of bars and coins by central banks increased by 6.0% year-on-year to 277.0 tons in the second quarter and a total of 582.0 tons in the first half of the year, thanks to positive dynamics in key markets, including the United States and Turkey. Gold ETF outflows of 21.0 tons in the second quarter were notably lower than the 47.0 tons in the same period last year, resulting in a net figure of 50.0 tons in the first half of the year. In addition, according to July data, the People's Bank of China and the National Bank of Poland purchased 23.0 tons each, and the Central Bank of the Republic of Türkiye purchased 17.0 tons.
Meanwhile, the US dollar is also in demand amid uncertainty surrounding the adoption of the US budget for the next fiscal year. Despite the fact that preliminary agreements were previously reached between President Joe Biden and Speaker of the US House of Representatives Kevin McCarthy, there is currently no talk of any unity. Analysts also note that the issue of approval of the document is complicated by the election campaign.
Macroeconomic statistics published on Tuesday also put pressure on the US currency: New Homes Sales in August showed a sharp decline of 8.7% after an increase of 4.4% in the previous month, and in absolute terms the figure amounted to 0.675 million homes, which is significantly below the previous value at 0.714 million.
Support and resistance
Bollinger Bands on the daily chart show a moderate decline: the price range is expanding, but is currently unable to keep up with the surge in “bearish” activity. MACD is declining, maintaining a strong sell signal (the histogram is located below the signal line). Stochastic maintains a confident downward direction, but is located in close proximity to its lows, indicating the risks of the instrument being oversold in the near future.
Resistance levels: 1900.00, 1907.40, 1915.00, 1923.06.
Support levels: 1892.75, 1880.00, 1869.49, 1850.27.
![https://i.ibb.co/D1fgk4k/XAUUSD270923-33.png](https://i.ibb.co/D1fgk4k/XAUUSD270923-33.png)
![https://i.ibb.co/8bnQ8px/XAUUSD270923-333.png](https://i.ibb.co/8bnQ8px/XAUUSD270923-333.png)
Trading tips
Short positions can be opened after a confident breakdown of the level of 1892.75 with a target of 1880.00. Stop loss — 1900.00. Implementation time: 1-2 days.
A rebound from the support level of 1892.75 with a subsequent breakout of the level of 1900.00 may become a signal to open new long positions with a target of 1915.00. Stop loss — 1892.75.
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