Current Dynamics
The XAU/USD pair is trading above the 2300.0 level, supported by strong demand from global central banks and trading platforms.
Officials at the U.S. Federal Reserve do not plan to adopt a "dovish" stance until the end of the summer, and CME's FedWatch tool indicates only a 4.7% probability of a rate cut at the July 31 meeting.
The main reason for this expectation was the rhetoric of Fed Chairman Jerome Powell, who stated that there is not enough positive data to justify active measures to change course.
He also confirmed that the labor market is no longer "overheated" and that the economy is returning to pre-crisis 2019 levels, despite inflation still exceeding the 2.0% target.
Tomorrow at 14:30 (GMT+2), Consumer Price Index (CPI) data will be released, with a forecast correction from 3.3% to 3.1% year-on-year and an increase from 0.0% to 0.1% month-on-month.
Another factor contributing to the stability of gold prices is Chinese statistics. In the last two months, gold imports to the country were suspended, keeping reserves at 2,264 thousand tons.
Some experts believe the government continues to import gold without disclosing this information, indicating a possible intention to buy more than previously, following a trend observed in other central banks worldwide.
The National Bank of Poland increased its gold reserves by 4.0 tons in June, while India bought 9.0 tons, raising its reserves to 841.0 tons.
Regarding trading volumes on the CME, signs of forming new large positions have emerged since July 3, with the value rising from 235.0 thousand to 336.7 thousand, exceeding spring averages.
Support and Resistance Levels
On the daily chart, the trading instrument is correcting within the "diamond" pattern with boundaries from 2400.0 to 2310.0.
Technical indicators maintain an unstable buy signal:
- Alligator: The fast EMAs are above the signal line.
- AO (Awesome Oscillator): The histogram is forming corrective bars above the transition level.
- Resistance: 2390.0, 2450.0
- Support: 2340.0, 2280.0
Trading Scenarios
- Long Positions:
- Entry: After the price rises and consolidates above 2390.00.
- Target: 2450.00.
- Stop Loss: 2360.00.
- Short Positions:
- Entry: After the price falls and consolidates below 2340.00.
- Target: 2280.00.
- Stop Loss: 2380.00.