Current trend

The XAU/USD pair is declining, developing the "bearish" momentum formed at the end of the last trading week, which ended with weak negative dynamics. The instrument is testing the level of 2500.00 for a breakdown, while investors expect new drivers on the market. Market activity remains muted today as US markets are closed for the Labor Day holiday, with investors assessing July Personal Consumption Expenditure Price Index data released in the US on Friday. The Core PCE added another 2.6% year-on-year, beating expectations for 2.7%, and rose 0.2% month-on-month, while the broader measure rose 2.5% and 0.2%, respectively, unchanged from June.

Inflation data has slightly increased the likelihood of a 50-basis-point cut in the US Federal Reserve's interest rate at its September meeting, but market participants are considering a –25-basis-point adjustment as the main scenario. At the end of the week, the US will publish the August labor market report, which may also influence the regulator’s future decisions. Analysts expect an increase in Nonfarm Payrolls from 114.0 thousand to 163.0 thousand, a reduction in the Unemployment Rate from 4.3% to 4.2%, and an acceleration in Average Hourly Earnings from 0.2% to 0.3%.

Meanwhile, demand for gold is increasing as the US presidential election approaches. Geopolitical risks in the Middle East and Eastern Europe also remain relevant. It is quite possible that in 2025 the instrument will try to consolidate in the new channel 2600.00–2700.00, and some analysts do not rule out a possible rally to the level of 3000.00; however, such scenarios are considered "exceptional".

Support and resistance

On the daily chart Bollinger Bands are trying to reverse horizontally. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic demonstrates similar dynamics, being located approximately in the center of its area and signaling in favor of further development of "bearish" dynamics in the near future.

Resistance levels: 2510.00, 2525.00, 2540.00, 2555.00.

Support levels: 2500.00, 2483.64, 2470.00, 2450.00.

Trading tips

Short positions may be opened after a breakdown of 2483.64 with the target at 2450.00. Stop-loss — 2500.00. Implementation time: 2-3 days.

A rebound from 2483.64 as from support followed by a breakout of 2500.00 may become a signal for opening new long positions with the target at 2525.00. Stop-loss — 2483.64.