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ANALYSIS :Gold trades with modest losses near $1390 area, focus remains on Powell/FOMC minutes

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Gold trades with modest losses near $1390 area, focus remains on Powell/FOMC minutes

  • Fading prospects for aggressive Fed rate cuts continue to weigh on the commodity.
  • Recovering US bond yields underpin the USD and contribute to the weaker tone.
  • Wednesday’s key focus will remain on Powell’s testimony and FOMC minutes.

Gold held on to its mildly negative tone through the early European session on Wednesday and is currently place at the lower end of its daily range, around the $1390 region.

As investors continue to scale back expectations for aggressive interest rate cuts by the Fed, a strong follow-through uptick in the US Treasury bond yields turned out to be one of the key factors driving flows away from the non-yielding yellow metal.

Meanwhile, the US Dollar held steady near three-week tops and further collaborated towards capping the overnight attempted bounce from one-week lows, rather exerted some additional downward pressure on the dollar-denominated commodity.

The ongoing slide seemed unaffected by the prevalent cautions mood around equity markets, which tends to underpin the precious metal’s safe-haven demand, with some repositioning trade ahead of Wednesday’s key event risk further contributing to the weaker tone.

All eyes remain glued to the Fed Chair Jerome Powell’s two-day semiannual testimony before the Congress, starting this Wednesday, which will be closely scrutinized for fresh clues over the central bank’s near-term monetary policy outlook.

This will be followed by the release of June FOMC meeting minutes – due later during the US trading session, and should play a key role in determining the commodity’s next leg of a directional move, though uncertainty over US-China trade talks might help limit the downside.

Technical levels to watch

XAU/USD

Overview
Today last price 1392.36
Today Daily Change -5.32
Today Daily Change % -0.38
Today daily open 1397.68
Trends
Daily SMA20 1387.76
Daily SMA50 1331.97
Daily SMA100 1315.4
Daily SMA200 1285.6
Levels
Previous Daily High 1399.9
Previous Daily Low 1386.34
Previous Weekly High 1436.2
Previous Weekly Low 1382.02
Previous Monthly High 1438.66
Previous Monthly Low 1306.18
Daily Fibonacci 38.2% 1394.72
Daily Fibonacci 61.8% 1391.52
Daily Pivot Point S1 1389.38
Daily Pivot Point S2 1381.09
Daily Pivot Point S3 1375.83
Daily Pivot Point R1 1402.94
Daily Pivot Point R2 1408.2
Daily Pivot Point R3 1416.49
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