Market Analysis
Gold price (XAU/USD) remains stagnant, lacking significant momentum, as it continues its sideways movement during the Asian session on Tuesday. The prevailing belief that the Federal Reserve (Fed) will maintain higher interest rates for an extended period due to persistent inflationary pressures bolsters the US Dollar (USD), attracting some buying interest.
Additionally, reduced tensions in the Middle East serve as a deterrent for the safe-haven appeal of gold. However, any downward pressure is offset by traders' cautious approach, awaiting signals regarding the Fed's stance on interest rates before committing to new positions.
The focus is squarely on the pivotal two-day FOMC monetary policy meeting starting today and the upcoming release of the influential US monthly employment report, known as the Nonfarm Payrolls (NFP) report, on Friday.
These events are expected to shape USD demand in the short term and could provide impetus to gold prices. Ahead of these key events, Tuesday's US economic calendar, featuring the Chicago PMI and the Conference Board's Consumer Confidence Index, could offer short-term trading opportunities.
In terms of technical analysis, gold prices are encountering resistance around the 200-hour Simple Moving Average (SMA) level, which has proven challenging to breach over the past couple of days.
This obstacle, presently situated near the $2,346 mark, coincides with the 38.2% Fibonacci retracement level from the recent pullback. A breakthrough above this level could pave the way for further gains, with the next resistance seen around the $2,352-2,353 range, followed by $2,371-2,372. Conversely, a downside move below the 100-hour SMA may expose last week's swing low around $2,292-2,291, with additional support near $2,320. Further declines could target the $2,268-2,265 zone.
Paraphrasing text from "FX Street" all rights reserved by the original author.