Gold prices (XAU/USD) continued their sideways movement on Tuesday, maintaining a narrow range around the $2,500 mark as the European trading session began. This stable behavior is influenced by a generally positive sentiment across global equity markets, which has dampened demand for the safe-haven metal. Additionally, a modest recovery of the US Dollar from its lowest level since January is contributing to capping gold’s upward potential.
Market participants appear hesitant, opting to wait for clearer signals regarding the Federal Reserve’s (Fed) potential rate-cut trajectory before making any significant moves in the gold market. The focus is now on the release of the July FOMC meeting minutes on Wednesday and Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium on Friday. These events could provide the necessary cues for traders, although dovish expectations for the Fed and ongoing geopolitical risks are likely to offer continued support to gold, limiting its downside.
ECONOMIC CALENDAR: FOMC MINUTE
From a technical standpoint, the current range-bound action in gold may be seen as a bullish consolidation phase, setting the stage for a potential upward move. Indicators on the daily chart remain in positive territory, with room to move before entering overbought conditions. However, gold bulls may need to see sustained buying momentum that surpasses last Friday’s all-time high of around $2,509-2,510 before confidently positioning for further gains.
Conversely, the immediate downside appears to be safeguarded by the $2,472-2,470 support zone. Any drop below this level is expected to attract new buyers, with further declines likely to be contained near the $2,448-2,446 region. A decisive break below this key support could signal a deeper correction, potentially driving prices below the $2,400 level, with the 50-day Simple Moving Average (SMA) near $2,392 acting as a critical support.