We present a medium-term investment review of the XAU/USD pair.

After a sharp rise in early spring, precious metals are consolidating amid profit-taking and the formation of new positions by market participants. However, experts do not doubt that the trading instrument will continue to grow this year. Global financial centers, like investors on the exchange, do not support the American dollar with a large volume of transactions, which has already led to minor fluctuations in the USDX within 104.0–105.5 points. In addition, against a slowdown in inflation, representatives of the US Fed are increasingly speaking out in favor of easing monetary policy. However, instead of the previously expected three adjustments to the cost of borrowing by the end of the year, experts are counting on only one. According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of keeping the interest rate at the current level during the July meeting is a high 89.7%.

Despite ongoing consolidation, Q1 global demand for the metal still significantly exceeds supply, reaching 1.238K tons, the highest since 2016, according to the World Gold Council (WGC), up 3.0% from a year earlier. Global central banks are actively replenishing reserves, increasing them by 290.0 tons in the quarter alone. The demand from ETFs has adjusted by –114.0 tons. North American and European funds have reduced purchases the most. The bulk of the indicator comes from China and India, leading in jewelry demand, which has decreased by only 2.0% due to a decline in purchasing power in the EU and North America. According to daily reports from the Chicago Mercantile Exchange (CME Group), total futures and options positions remain small, and open interest has fallen to 453.0K contracts over the past week. Trading volume is stable and exceeds weekly standards only on Fridays when most short-term investors fix their positions. It currently stands at only 123.9K trades, although during sharp price movements on the exchange, it exceeded 400.0K positions, and this reflects the low probability of a strong movement of the XAU/USD pair soon.

Technical indicators confirm the probability of further asset growth: on the weekly chart, the trading instrument is moving within a wide ascending channel of 2500.0–2200.0.

At the moment, a downward channel with dynamic boundaries of 2380.0–2240.0 is forming. The Fibonacci extension core trend of 100.0% at 2278.0 is a key mark for the “bears.” The target of the upward dynamics is at the Fibonacci extension full trend of 161.8% at 2580.0.

Let’s assess the key levels on the daily chart.

The price is consolidating within the Diamond pattern. Since the quotes stay above the 100.0% trend level at 2278.0, there is sufficient trading volume on the market to continue breaking the annual high of 2430.0. If the asset declines and reaches 2230.0, the upward scenario will either be canceled or postponed in time, and it is better to liquidate open buy positions. The target zone is around 2580.0, which coincides with the full trend level of 161.8% by Fibonacci extension. After reaching this, it is better to fix the profit on open buy positions.

Let’s assess the entry levels on the four-hour chart.

The entry-level for long positions is at the week’s high of 2370.0. After consolidation above it and the resistance level of the downwards channel on the four-hour chart, there will be no significant obstacles on the price’s way to the target level of 2580.0, and the positions will be implemented.

Considering the average daily volatility of the trading instrument over the last month, amounting to 1512.0 points, the movement to the target zone of 2580.0 may take approximately 57 trading sessions. With the investor activity increase, this time may reduce to 48 days.