Fundamental analytics

Gold declines from 5-month high


On Wednesday, in Asia, gold was trading near yesterday's intraday low. The price is under pressure from the dynamics of the dollar index (+ 0.17%) with which the precious metal has a close inverse correlation.
The dollar was able to slightly strengthen its position in the market after the release of stronger than expected economic data from the US. But investors are still refraining from active operations with the dollar ahead of the publication of an important report on the labor market on Friday. Therefore, gold has a good chance of renewing its upward movement.
A positive signal for gold is the dynamics of the long-term US Treasury yield movement. Today, the yield on 10-year bonds dropped to 1.608%, against Tuesday's high of 1.637%.
Also on Tuesday, Fed spokeswoman Lael Brainard said that the regulator is not yet ready to deviate from the current "pigeon" monetary policy. Fed's mild statements amid rising inflationary expectations create a good fundamental basis for the continuation of the bullish trend in gold.
Other precious metals are trading in the red today. Silver slipped 0.8%. Platinum has lost 1% of its value. Palladium dipped 0.5%.
On the chart, after the renewal of the 5-month high of trading, a corrective movement develops. The nearest strong support level is in the area of 1805.00, so the decline can be continued locally.
An interesting area for buying today is located at the level of 1885.00.
Sell entry points should be considered in the area of the 1914.00 level.
· Resistance levels: 1914.00, 1920.00, 1930.00.
· Support levels: 1885.00, 1865.00, 1860.00.
The main scenario is a decline to 1885.00 and a renewed upward movement.
An alternative scenario - growth to 1914.00 from current levels.
The current fundamental background is neutral.
Trading recommendations: we are considering buy signals in the area of the level of 1885.00.