Gold’s Gleam Dims Amid Hawkish Fed Outlook and Easing Geopolitical Tensions
The price of GOLD (XAU/USD) continues its downward trajectory from last week’s peak, the highest in over five months, as it moves lower in the Asian session on Wednesday. This decline marks the third consecutive day of losses, pushing the precious metal to a new weekly low near the $1,978 mark.
Diminishing fears surrounding the Israel-Hamas conflict, coupled with expectations of a hawkish stance from the Federal Reserve, exert pressure on the non-yielding bullion.
Nonetheless, the downside potential for GOLD prices seems contained, with market attention firmly anchored on the forthcoming conclusion of the Federal Open Market Committee’s (FOMC) two-day monetary policy meeting.
Additionally, concerns over China’s economic rebound at the onset of Q4 may bolster the appeal of gold as a safe-haven asset, potentially curbing further declines. This context suggests prudence before conclusively declaring that XAU/USD has reached its short-term peak.
Technical Analysis: Potential for Gold Rebound on Dips
From a technical standpoint, the current retracement can be interpreted as a natural corrective phase following a significant 10% surge from October’s low. This viewpoint is reinforced by the Relative Strength Index (RSI) on the daily chart retreating from overbought levels, indicating that any further pullbacks could attract buyers and be relatively short-lived.
Immediate support is anticipated near the $1,970 mark, with a breach potentially leading to a retest of last week’s low in the $1,954-$1,953 range.
Conversely, resistance is identified near the recent high of $1,986 during the Asian session, followed by the pivotal $2,000 threshold and the multi-month high in the $2,007-2,009 area. A decisive break above this region could extend the bullion’s robust three-week uptrend, targeting the next significant resistance at the $2,022 level.
Gold Live Chart
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