Gold Price Struggles at Three-Month Low as Fed Testimony and US-China Tensions Weigh

The price of GOLD (XAU/USD) remains stagnant around $1,935, its lowest level in three months, as it rebounds from the $1,920 support. The market remains cautious due to mixed statements from the United States Federal Reserve (Fed) and concerning updates regarding US-China relations and China’s stimulus measures. Despite these factors, global central bank actions and a lack of major events have limited the weakness in gold prices, leaving bears hopeful.

The escalating tensions between the US and China, triggered by US President Joe Biden’s description of his Chinese counterpart as a “dictator,” have weighed on gold prices. However, China’s dismissal of criticism and the absence of downside pressure on XAU/USD indicate a mixed response from the market. Meanwhile, concerns about China’s economic slowdown and expectations of additional stimulus measures provide volatility to GOLD traders.

The focus shifts to the upcoming central bank decisions in the UK, Switzerland, Indonesia, and Mexico, as well as the second round of testimony by Fed Chair Powell before the Senate Banking Committee. These events could potentially impact gold prices and provide clearer market direction.

However, a convergence of the 200-Exponential Moving Average (EMA) and a downward-sloping trend line near $1,965 presents a significant hurdle for bullish momentum. If surpassed, attention will shift to the $1,985 resistance level. On the downside, a break below $1,920 could lead to a decline towards the $1,900 psychological level, with further weakness potentially testing the early March swing high around $1,858.