Gold is trading in a narrow band between $4,095 and $4,134 as markets wait for the Federal Reserve's meeting minutes. The medium-term trend leans bearish, with the metal capped below the $4,200 resistance level that now defines its direction.
Gold's medium-term trend leans bearish, and the outlook stays negative as long as the price holds below $4,200 per ounce, according to DailyForex analyst Mahmoud Abdallah. The metal spent Wednesday's sessions pinned between $4,095 and $4,134 while traders waited for a single catalyst.
Fed minutes set the session's tone
That catalyst is the release of the Federal Reserve's meeting minutes, scheduled for 21:00 Egypt time. Investors want to know whether the minutes lean toward cutting interest rates in the coming period, a shift that could directly reflect on the US Dollar and Treasury yields and, in turn, on gold.
The pressure on gold has come from the other direction so far. Rising US Treasury yields and a stronger Dollar have weighed on the metal in recent sessions, blunting the effect of weaker US economic data that had previously supported it. Monetary policy expectations remain the primary driver, though geopolitical tensions in the Middle East may keep offering gold limited support as a safe haven.
Charts favor the sellers
The technical picture backs the bearish case, and the moving averages tell most of it. Gold is trading below several of them, and the RSI sits under the 50 level, both pointing to continued selling pressure. Support waits at $4,110, then $4,050 and $3,970; resistance stands at $4,200, $4,280 and $4,340.
Abdallah frames selling as the trade most consistent with the trend, especially if the price climbs toward $4,230 and then targets $4,150. A break above $4,200 on a daily close could open the door to a corrective move toward $4,280 and $4,340. Until then, $4,200 is the line that decides gold's next direction.
Source: DailyForex
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