Gold bounces off 50-SMA support; bearish bias remains amid Fed hike bets and firmer USD
Gold (XAU/USD) attracts some dip-buyers near the $4,284-$4,283 region during the Asian session on Tuesday and moves away from an over one-month low, touched the previous day.
Gold briefly recovered near the $4,300 level on Tuesday, attempting to gain momentum following a recent six-week low near $4,250. However, the precious metal has struggled to sustain this momentum amid a bearish outlook and the looming two-day Federal Reserve monetary policy meeting. The US Federal Reserve is set to announce its decision on Wednesday, with investors closely watching the updated economic projections, including the dot plot and comments from Fed Chair Kevin Warsh.
The upcoming meeting will significantly impact the US Dollar (USD) price dynamics, offering fresh direction for the non-yielding Gold market. Inflation risks stemming from higher energy prices continue to loom, with global bond selloffs driven by increased public and corporate borrowing contributing to a 10-year US Treasury yield surpassing the 5% threshold for the first time since 2023.
Geopolitical uncertainties, particularly the ongoing Middle East crisis, keep the safe-haven USD near a nearly two-week high, potentially limiting any further gains for Gold. Technical analysis indicates that Gold is currently trading just below the 50.0% retracement level of the June-August upswing and above the 50-day Simple Moving Average (SMA), suggesting a period of consolidation rather than a clear trend.
The Relative Strength Index (RSI) stands around 45, indicating subdued momentum, while the Moving Average Convergence Divergence (MACD) remains in negative territory, reinforcing the notion that rallies may falter unless buyers reclaim overhead Fibonacci resistance. A move above the 50.0% retracement near $4,323 may encounter strong resistance at the 38.2% Fibonacci retracement level near $4,412 and then the 23.6% level close to $4,522 if upside pressure persists.
Conversely, the immediate support for Gold lies at the 50-day SMA around $4,275, followed by the 61.8% Fibonacci retracement level near $4,234. A convincing break below this support zone would expose deeper structural support at the 78.6% retracement near $4,108 and the prior anchor area around $3,947.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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