XAU/USD: the likelihood of growth remains
Current trend
Gold is strengthening amid rising inflation in the US and is trading around 1855.00 with potential for further gains towards 1908.00.
Following consumer inflation in the USA, prices for exports and imports of goods are also rising. According to data released yesterday, the Export Price Index showed an increase of 1.5% in October, which is higher than analysts' forecast of 0.9%, as well as the previous value of 0.4%. The Import Price Index also rose 1.2%, exceeding the projected 1.0% and higher than the previous value for September at 0.4%.
The rise in inflation is associated with the recovery in consumption. US retail sales rose 1.7% in October, higher than the 1.2% forecast. The recovery in consumption, in turn, leads to a shortage of goods and their rise in prices. Consequently, investors view gold as a defensive asset, which also appreciates in price due to inflation.
The long-term trend in the XAU/USD pair remains upward. The resistance level of 1870.00 was reached this week. For now, it keeps the price from further growth, but if it is broken out, buyers will try to reach the next target at 1908.00.
A strong level was formed at 1829.00. In July and September 2021, this level acted as resistance, and now it has become support. New purchases of gold can be considered from this level.
The medium-term trend is upward. Last week, market participants reached target zone 2 (1874.00–1865.00). If it is broken out, the next growth target will be at the target zone 3 (1964.00–1955.00). Key support is shifting to 1802.00–1794.00.
Support and resistance
Resistance levels: 1870.00, 1908.00.
Support levels: 1829.00, 1761.00.
Gold is strengthening amid rising inflation in the US and is trading around 1855.00 with potential for further gains towards 1908.00.
Following consumer inflation in the USA, prices for exports and imports of goods are also rising. According to data released yesterday, the Export Price Index showed an increase of 1.5% in October, which is higher than analysts' forecast of 0.9%, as well as the previous value of 0.4%. The Import Price Index also rose 1.2%, exceeding the projected 1.0% and higher than the previous value for September at 0.4%.
The rise in inflation is associated with the recovery in consumption. US retail sales rose 1.7% in October, higher than the 1.2% forecast. The recovery in consumption, in turn, leads to a shortage of goods and their rise in prices. Consequently, investors view gold as a defensive asset, which also appreciates in price due to inflation.
The long-term trend in the XAU/USD pair remains upward. The resistance level of 1870.00 was reached this week. For now, it keeps the price from further growth, but if it is broken out, buyers will try to reach the next target at 1908.00.
A strong level was formed at 1829.00. In July and September 2021, this level acted as resistance, and now it has become support. New purchases of gold can be considered from this level.
The medium-term trend is upward. Last week, market participants reached target zone 2 (1874.00–1865.00). If it is broken out, the next growth target will be at the target zone 3 (1964.00–1955.00). Key support is shifting to 1802.00–1794.00.
Support and resistance
Resistance levels: 1870.00, 1908.00.
Support levels: 1829.00, 1761.00.
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