XAU/USD: Lael Brainard returned the gold price in the range _13/09/2016

Trading recommendations

Buy Stop 1335.00. Stop-Loss 1328.00. Objectives 1350.00, 1365.00, 1385.00, 1400.00, 1410.00, 1435.00

Sell ​​Stop 1322.00. Stop-Loss 1333.00. Objectives 1305.00, 1264.00, 1252.00, 1218.00


Technical analysis

The price of gold has rebounded from the support level of 1324.0 (38.2% Fibonacci level of the correction to the wave decline from October 2012) and today is growing significantly with the opening of the trading day.

The price of gold, it seems, can not determine the direction of motion on the background of contradictory statements about the probability of Fed leaders raising interest rates in the US in the coming months, on the one hand, and the weak US macroeconomic statistics, on the other hand.

On the daily chart the pair XAU / USD is in a downward channel with a small angle, the upper limit of which is held at the moment near the level of 1360.00.

On the weekly chart the pair XAU / USD remains within the ascending channel. The upper limit of the channel runs close to the level of 1410.0 (50.0% Fibonacci level).

OsMA and Stochastic indicators at different time intervals show a mixed picture. If the daily chart indicators recommend short positions on the 4-hour and weekly charts indicators are developed and transferred to the buyer.

 Price is above the key support level of 1324.00 (38.2% Fibonacci level and EMA50 daily chart), 1264.00 (EMA200 on daily and weekly charts). There is the high probability of further growth.

On the 4-hour chart price is in the uplink. Break of the resistance level of 1332.00 will signal the opening of long positions in gold and a pair XAU / USD.

Fixing prices above the local resistance 1350.00 levels increase the likelihood of further growth, and a break above the range of levels of 1365.00, 1385.00 create risks to the price of gold continued to increase until the hypothetical mark of $ 1400.00 per ounce.

The reverse scenario is associated with a confirmed break the support level of 1324.00 and a reduction to the level of 1305.00 (Aug lows). Further targets will be the levels of 1264.00 (EMA200 the weekly and daily charts and the lower line of the rising channel on the weekly chart), 1252.00 (EMA144 on the weekly chart).

Fixing prices below 1218.00 (23.6% Fibonacci level) create conditions for further decline XAU / USD pair and return to the downward global trend, which began in October 2012.

Support levels: 1324.00, 1305.00, 1264.00, 1252.00, 1218.00

Resistance levels: 1332.00, 1350.00, 1365.00, 1385.00, 1400.00, 1410.00, 1435.00, 1500.00


Overview and Dynamics

Today, with the opening of the trading day the dollar returns incurred losses yesterday on the foreign exchange market, and the price of gold is moderately reduced, aiming at the support level and the level of US $ 1326.00 per ounce. Expectations of low interest rates support gold prices, which does not bring interest income and can not compete with the risky assets, income.

In the context of the interest rate increase in the United States gold losing investment attractiveness, yielding dollar and safer assets such as government bonds.

A stronger dollar also makes gold, whose prices are denominated in US currency less attractive for holders of other currencies as the cost of borrowing for its acquisition and storage grow.

Nevertheless, the demand for gold will be supported by the trend to lower interest rates in a number of the world's central banks with the prospect of further easing of monetary policy, as well as the continued yet uncertainty about the global economy, including due Brexit.

After Monday representative of the US Federal Reserve Lael Brainard said that the grounds for preventive rate hikes seem less convincing, and improvement in the labor market has not had the desired impact on inflation, the US dollar fell sharply on the currency market. The opinion of investors who believe the Fed in the coming months will be to keep interest rates unchanged, after the speech Brainard strengthened. Futures on interest rates on federal funds have shown a 15% chance of the Fed raising rates this month, compared to 24% a day earlier.

As a result, applications Brainard US stocks and gold price quotes changed the direction of its movement and after the start of the Asian session decline to the end of Monday's trading day rose, largely regaining the losses incurred on Friday. Brainard statement contrasts sharply with the statements of the president of Federal Reserve Bank of Boston Eric Rosengren, who said on Friday that "there are substantial grounds" for the tightening of monetary policy, which will allow to avoid overheating of the economy, the stock markets followed by a wave of sales.

Today comes into force "quiet mode", i.e. Fed's ban on public comments before the Fed meeting on 20-21 September.