XAU/USD: general analysis
Gold continues to drop against the USD despite minor correction. On Monday, the price of gold had almost reached the 8-month lows and then went up again. The pair has continued to rise on Tuesday and is still moving up today.
Investors are waiting for the information from the US Open Market Committee on whether the asset repurchase program will be reduced or not. They would also like to know if interest rates on bonds will be increased. Such decisions may prevent the rise in gold and make investors to search for the alternative assets for investments.
In the short term the pair may undergo upward correction. In the long-term the decline in the pair will continue, as the demand for the metal is not high among the Asian buyers; despite the fact that the price of the metal has dropped to the many-months lows.
Support and resistance
The nearest resistance level is the highs of Tuesday at 1241.70. Support level is the opening price level of this week at 1228.50.
In the short-term it is recommended to open long positions with take profit at the level of 1241.70 and stop-loss at the level of 1228.50.
In the long-term it makes sense to open short positions with the target of 1228.50 and stop-loss at 1241.70.
Analyst of LiteForex Investments Limited