Ahead of the US PCE report, bulls appear apprehensive as the price of gold maintains its slight intraday advances

Gold price (XAU/USD) extends its recovery from the one-week low near $2,600 observed on Tuesday, gaining positive momentum for the second consecutive day on Wednesday. Geopolitical concerns, including the ongoing Russia-Ukraine war and tariff plans from US President-elect Donald Trump, continue to drive safe-haven demand for the precious metal.

Additionally, a weaker US Dollar (USD) supports Gold’s rally, pushing it to a two-day high around the $2,645 level during the European session. However, the gains are limited by the prevailing risk-on sentiment, expectations of slower interest rate reductions by the Federal Reserve, and rising US Treasury yields, which weigh on the appeal of the non-yielding asset. Traders now await key US inflation data for fresh directional cues.

Gold Price Bulls Eye Break Above 100-Period SMA on 4-Hour Chart

From a technical standpoint, the rebound from the 61.8% Fibonacci retracement level of the recent recovery, along with continued strength, supports a bullish outlook. However, daily chart oscillators have yet to confirm a sustained positive trend. Significant resistance is anticipated near the 100-period Simple Moving Average (SMA) on the 4-hour chart, located around the $2,645 mark. A decisive move above this level could open the door for further upside, targeting $2,665 initially, followed by the $2,677-$2,678 resistance zone, and potentially the $2,700 psychological barrier.

Key Support Levels to Watch

On the downside, the $2,624-$2,622 range provides immediate support, with the $2,600 mark acting as a critical threshold. A break below this level could encourage bearish traders, exposing the 100-day SMA near $2,569-$2,568. Further declines may lead to a test of the monthly swing low around $2,537-$2,536. Failure to hold these support levels could signal a resumption of the broader corrective trend from the October peak of $2,800.

 

 

 

 

 

 

 

 

 

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