Gold price lacks bullish conviction ahead of US macro data and FOMC minutes

Gold price (XAU/USD) attracts some buyers on Wednesday and for now, seems to have snapped a three-day losing streak to the $2,055 area, or a near one-week low touched the previous day.

Technical Overview

From a technical perspective, the overnight failure near the all-time high closing, around the $2,077-2,078 region, and the subsequent slide warrants caution for bullish traders. The said hurdle should now act as a key pivotal point, which if cleared decisively will set the stage for a move towards reclaiming the $2,100 round-figure mark. Meanwhile, oscillators on the daily chart are holding comfortably in the positive territory and support prospects for the emergence of some dip-buying at lower levels.

The overnight low, around the $2,055 area, now seems to protect the immediate downside ahead of the $2,040 horizontal zone. A convincing break below the latter might turn the Gold price vulnerable to accelerate the downfall further towards the $2,020 intermediate support en route to the 50-day Simple Moving Average (SMA), currently near the $2,008-2,007 region, and the $2,000 psychological mark. Some follow-through selling will expose the $1,960 confluence, comprising the 100- and the 200-day SMAs.

Fundamental Overview

Gold price (XAU/USD) attracts some buyers on Wednesday and for now, seems to have snapped a three-day losing streak to the $2,055 area, or a near one-week low touched the previous day. The US Dollar (USD) stalls its recent recovery move from a multi-month low amid expectations about an imminent shift in the Federal Reserve's (Fed) policy stance. This, along with concerns about fragile economic recovery in China and geopolitical risks, assists the safe-haven commodity to stick to its modest intraday gains through the early European session. 

That said, questions about the possibility of early interest rate cuts by the Fed led to the overnight sharp move higher in the US Treasury bond yields. This, in turn, could act as a tailwind for the USD and cap the upside for the non-yielding Gold price. Traders also seem reluctant to place aggressive bullish bets ahead of the FOMC meeting minutes, which will be scrutinized for cues about the Fed's future policy moves. In the meantime, the US ISM Manufacturing PMI and JOLTS Job Openings data will be looked upon for short-term trading opportunities.