Gold Price Edges Up Within Range as Traders Await Powell's Speech

 

Gold (XAU/USD) has shown a modest upward trend for the second consecutive day, though it lacks strong bullish momentum and remains within a narrow range seen over the past week.

Traders are hesitant to make significant moves ahead of key economic events, particularly Federal Reserve Chair Jerome Powell's speech today and the upcoming US Nonfarm Payrolls (NFP) report on Friday. 

These developments are expected to provide more insight into the Fed's stance on interest rate cuts and will play a crucial role in determining the short-term direction for gold.

While the expectation of a cautious approach to rate cuts by the Fed, combined with concerns about inflation from US President-elect Trump's policies, has led to a modest rise in US Treasury bond yields, this in turn has supported the US Dollar. This remains a headwind for gold prices. However, geopolitical uncertainties, including Trump's trade tariffs and concerns about a potential second wave of global trade conflicts, provide some support to the precious metal, preventing significant downside.

From a technical standpoint, the current range-bound action may be seen as a bearish consolidation following last week's decline. The recent drop below an ascending channel suggests a bearish outlook. Gold is expected to find support around $2,600, with further declines possibly targeting the 100-day Simple Moving Average (SMA) near $2,579-$2,578. A break below this level could see gold test November's low at around $2,536.

On the upside, gold faces immediate resistance around $2,655 and $2,666. A stronger rally could face further hurdles at $2,677-$2,678 and $2,700. Any sustained move above these levels may shift the market sentiment toward the bullish side, allowing for a more significant rally.

 

 

 

 

 

 

 

 

Paraphrasing text from "FXSTREET" all rights reserved by the original author.