General analysis XAUUSD for 29.03.2022

Current dynamics

Gold has lost significantly in price this week and is currently consolidating near the strong psychological level of 1900. The trading instrument is under pressure from rising US Treasury bond yields. The yield on two-year bonds is at 2.43%, while the yield on benchmark ten-year bonds could exceed the 2.50% level in the near future. It is worth noting that in the current environment the pressure from rising yields is significant, as the metals market has virtually ignored the recent decline in the US currency. In addition, rising US equities traditionally reduce demand for "safe-haven" assets.
Today the XAU/USD is losing ground on the back of the Russia-Ukraine talks in Istanbul. This is the first contact between the conflicting parties in 2 weeks and even before the talks started market participants were expecting tensions to subside, which generated moderate pressure on gold. According to preliminary data, the sides managed to make significant progress on a number of key issues. First and foremost, the reduction of military activity in Kyiv and Chernihiv is worth mentioning. In addition, the parties discussed the possibility of a meeting between Putin and Ukrainian President Zelensky. Investors are awaiting specific comments on the meeting from both sides.

Tomorrow at 14:15 (GMT+2), macroeconomic statistics on the US labor market will be released, followed by data on US GDP at 14:30 (GMT+2). The main driver for the metals market remains the Istanbul talks and the reaction of the collective west to the negotiation process.

Support and resistance levels

On the 4h chart, the instrument is testing the lower boundary of the Bollinger Bands, which is a key support level. The indicator is pointing downwards and the price range continues to increase, indicating a continuation of the current trend after a correction. The MACD histogram is declining in the negative zone, maintaining a sell signal. Stochastic is correcting at the edge of oversold area, no signal to open positions has been formed.

• Support levels: 1832.65, 1864.50, 1888.50, 1904.50.
• Resistance levels: 1924.95, 1946.00, 1960.50, 1976.50, 1998.70.

Trading scenarios

• Open long positions above 1928.00 with a target of 1960.50 and a stop loss at 1914.50. Implementation period: 1-2 days.
• Short positions should be opened below the level of 1889.55 with a target of 1881.70 and a stop loss at 1919.50. Implementation period: 1-2 days.