The US Dollar Index (DXY), which measures the value of the greenback against six major currencies, rose for the third consecutive session on Wednesday, reaching 96.02. But the US Treasury Yield, on a 10-year note, remained flat for the fourth consecutive session, hovering around 1.78%. On Wednesday, the precious metal was under pressure, due to increased demand for the US dollar. However, bullion investors were also cautious and refrained from making any bets ahead of the US Federal Reserve’s policy decision in the upcoming meeting.

On the other hand, the tensions surrounding the Ukraine situation kept losses in the gold prices to a minimum for the session, as gold is regarded as a hedge against uncertainty and geopolitical disruption. Market participants are waiting for clues on the timeline for the potential rate hikes promised by the Fed this year.

On the other hand, a senior International Monetary Fund official has said that the expected rate hikes by the Fed might delay the economic recovery of Asian countries, which in turn would keep pressure on policymakers to guard against the risk of capital outflows.

Nevertheless, investors have almost priced in the interest rate hike move already, but gold is still facing pressures, as it is a hedge against inflation and geopolitical risks, and the interest rate hike will only increase the opportunity cost of holding non-yielding bullion.

On the data front, at 18:30 GMT, the Goods Trade Balance figures came in, showing a drop to -101.0B, against the forecast of -96.1B, which weighed on the US dollar. The prelim wholesale inventories also declined, falling by 2.1% against the expected 1.3%, which put downside pressure on the dollar. At 20:00 GMT, the new home sales numbers were released. They surged to 811K, against the predicted 759K, and supported the US dollar. Most of the data from the US side was unfavorable, which ultimately limited the losses in the gold prices.

Meanwhile, the World Health Organization (WHO) reported on Tuesday that approximately 21 million new coronavirus cases were reported from all over the world last week, marking the highest number of weekly cases recorded since the pandemic began. Gold investors will be waiting for the release of the FOMC statement after the meeting on Thursday. Before that, investors will remain cautious about placing any strong positions in the market.

On the technical side, the precious metal, gold, has violated an upward trendline at the 1,822 level. Currently, it is trading at 1,815, with a bearish bias. Immediate support for gold remains at 1,809, and a breakout below this could open up further room for selling, until 1,802 and 1,794.

The resistance remains at 1,822, and a bullish breakout at this level could lead the gold price towards the 1,832 mark. Consider staying bullish above 1,822 and vice versa. Good luck!