Gold prices (XAU/USD) struggled to gain momentum on Tuesday, hovering around the $2,320 mark during the Asian session. Last week's hawkish stance from the Federal Reserve, signaling a likely single rate cut in 2024, has bolstered US Treasury bond yields and supported the US Dollar (USD), attracting buyers on dips and limiting gains for the non-yielding precious metal.
The price of gold has remained within a narrow range over the past week and remains below the 50-day Simple Moving Average (SMA), prompting caution among traders before taking aggressive positions. Recent US economic data suggesting easing inflation pressures has fueled speculation of potential Fed interest rate cuts in September and December, which could weigh on the USD and cap significant declines for XAU/USD.
Technical analysis indicates that immediate resistance for gold lies around the $2,333-2,336 range, followed by the 50-day SMA near $2,344-2,345. A break above these levels could trigger short-covering and push prices towards the $2,360-2,362 zone, potentially paving the way for a move towards $2,387-2,388 and eventually testing $2,400. Conversely, a sustained drop below $2,300 may signal bearish momentum, with support levels around $2,285 and further downside potential towards $2,254-2,253 and $2,225-2,220.
Paraphrasing text from "FX Street" all rights reserved by the original author.
