Gold price (XAU/USD) extends its steady intraday descent through the first half of the European session on Tuesday and drops to a multi-day low, around the $2,315 region in the last hour. The US Dollar (USD) regains positive traction and reverses the previous day's slide back closer to a two-week low touched on Friday amid growing acceptance that the Federal Reserve (Fed) will keep rates higher for longer amis sticky inflation. This, along with easing geopolitical tensions in the Middle East, turn out to be key factors driving flows away from the safe-haven precious metal.
The downside for the Gold price, however, seems cushioned as traders might refrain from placing aggressive directional bets ahead of the crucial two-day FOMC meeting starting this Tuesday. Apart from this, the US Nonfarm Payrolls (NFP) report should provide cues about the Fed's rate-cut path, which, in turn, will drive the USD demand and determine the near-term trajectory for the non-yielding yellow metal. In the meantime, Tuesday's release of the Chicago PMI and the Conference Board's US Consumer Confidence Index might provide some impetus to the XAU/USD.
From a technical perspective, the Gold price has been struggling to make it through the 200-hour Simple Moving Average (SMA) barrier over the past two days. The said hurdle, currently pegged near the $2,346 region, now coincides with the 38.2% Fibonacci retracement level of the recent pullback from the all-time peak and should act as a key pivotal point. This is followed by 50% Fibo. level, around the $2,352-2,353 area, which if cleared could lift the Gold price to the next relevant hurdle near the $2,371-2,372 region. The momentum could extend further towards the $2,400 round figure en route to the all-time peak, around the $2,431-2,432 area touched earlier this month.
On the flip side, some follow-through selling and acceptance below the 100-hour SMA could make the Gold price vulnerable to retesting last week's swing low, around the $2,292-2,291 zone, with some intermediate support near the $2,320 region. The subsequent downfall has the potential to drag the XAU/USD further towards the next relevant support near the $2,268-2,265 area.
Following the Federal Reserve's (Fed) rate decision, the Federal Open Market Committee (FOMC) releases its statement regarding monetary policy. The statement may influence the volatility of the US Dollar (USD) and determine a short-term positive or negative trend. A hawkish view is considered bullish for USD, whereas a dovish view is considered negative or bearish.
Read more.Next release: Wed May 01, 2024 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
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