Current dynamics

The XAU/USD pair retreated from the 2800.00 level amid market volatility following Donald Trump's victory in the presidential election and the US Federal Reserve's -25 basis points interest rate adjustment, justified by the recovery of the labor market and inflation reaching the 2.0% target.

The decline in gold prices is confirmed by the growth in yields on leading bonds: the most popular 10-year US Treasuries are reaching the level of early July at 4.344%. If the regulator maintains its dovish rhetoric, metal prices will continue to strengthen: since the Chicago Mercantile Exchange (CME) FedWatch Tool reflects the probability of a change in the cost of borrowing in December by -25 basis points, amounting to 64.9%, the current downward trend in the XAU/USD pair does not look sustainable. The long-term dynamics of the asset are influenced by expectations of the implementation of the election program by the administration of new US President Donald Trump, which includes a revision of import tariffs, which may cause an acceleration of inflation, against which safe-haven assets such as gold will receive support.

A significant increase in demand for the asset is confirmed by data from the Chicago Mercantile Exchange (CME Group): since November 6, the volume of trading in gold contracts reached a peak of 611.0 thousand, after which it dropped slightly to the current 394.0 thousand, which is much higher than the average value of last month of 290.0-310.0 thousand.

Support and resistance levels

On the daily chart, the trading instrument is correcting above the support line of the long-term ascending channel 2820.0–2650.0.

Technical indicators weaken the buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO histogram forms correction bars above the transition level.

Resistance levels: 2705.0, 2810.0.

Support levels: 2640.0, 2550.0.

Trading scenarios

Long positions can be opened after the price grows and consolidates above the level of 2705.0 with the target of 2810.0. Stop loss is 2650.0. Implementation period: 7 days or more.

Short positions can be opened after the price declines and consolidates below 2640.0 with a target of 2550.0. Stop loss is 2700.0.