The price of gold (XAU/USD) experienced a setback on Tuesday, relinquishing gains made after hitting a record high earlier. The absence of significant catalysts during a subdued trading session, particularly in terms of top-tier economic data, is seen as a factor limiting the precious metal’s upward trajectory. Nevertheless, renewed interest in the US dollar, driven by increased speculation of interest rate hikes by the US Federal Reserve (Fed), ongoing geopolitical tensions, and robust demand from central banks and Asian markets, may offer some support to gold prices.
Market participants are closely monitoring statements from key Fed officials, including Waller, Williams, Barr, Bostic, Collins, and Mester, scheduled to speak later on Tuesday. The release of the Federal Open Market Committee (FOMC) Minutes on Wednesday is anticipated to provide further insights. Additionally, a hawkish stance from Fed officials is expected to bolster the US dollar and exert downward pressure on gold priced in USD.
Technical Analysis: Gold Price Maintains Constructive Outlook
Gold prices have registered a slight decline within the day’s trading. However, analysis on the four-hour timeframe reveals that the yellow metal continues to maintain a positive outlook, characterized by its position above the crucial 100-period Exponential Moving Average (EMA) with an upward trajectory. The Relative Strength Index (RSI) hovers in the bullish territory around 69.00, indicating a likelihood of the support level holding firm rather than being breached.
Potential upward momentum may prompt another attempt to surpass the all-time high of $2,450. Subsequently, the $2,500 psychological threshold presents the next significant hurdle.
Conversely, the former resistance level, now acting as support at $2,420, serves as an initial level of support for XAU/USD. Should downward pressure persist, attention may turn to the $2,400 round number as an additional support level. Notably, the critical support level is identified at the 100-period EMA, situated at $2,355.
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